iStterjsiDe  CDucational  jmonograpl^jj 

EDITED  BY  HENRY  SUZZALLO 

PROFESSOR    OF   THE    PHILOSOPHY    OF    EDUCATION 
TEACHERS   COLLEGE,   COLUMBIA    UNIVERSITY 

THE  TEACHER  AND 
OLD  AGE 


SECRETARY,    NATIONAL    SOCIETY    FOR    THE    PROMOTION 
OF    INDUSTRIAL   EDUCATION 

WITH    THE    COLLABORATION    OF 
W.   I.   HAMILTON 

AGENT,   MASSACHUSETTS   BOARD  OF  EDUCATION 


COPYRIGHT,    I9I3,    BY   CHARLES   A.    PROSSER 
ALL    RIGHTS    RESERVED 


CAMBRIDGB  .  MASSACHUSETTS 
U    .   S    .   A 


LB 


d  CONTENTS 

INTRODUCTION.     .     .     .     David  Snedden      v 

THE  TEACHER  AND  OLD  AGE 

Charles  A.  Prosser 

I.   Present    Extent    of    Teachers'    Pen- 
sions AND  Annuities i 

II.   Teachers'    Annuities    as    Part    of    a 

Program  of  Social  Insurance      .     .     19 

III.  The  Question  of  Teachers'  Retire- 
MENT  Allowances  in  the  Light  of 
Social  Insurance  Principles    ...    30 

o 

H     IV.   Characteristics  of  a  Model  Retire- 

E-< 

^  MENT  Law 70 

D 

g      V.  Getting  Legislation  .......    88 

Appendices 99 

*jp  Outline 136 

CM 

o 


4- 


INTRODUCTION 

By  David  Snedden 

Commissioner  of  Education  for  the  State  of  Massachusetts. 

The  calling  of  the  public-school  teacher  is  not 
yet,  in  America,  a  profession.  But  everywhere 
the  earnest  friends  of  education  are  striving  to 
transform  teaching  from  a  temporary  and  often 
casual  employment  into  a  vocation  exhibiting 
something  of  the  systematic  preparation,  the 
stability,  the  progressiveness,  and  the  dignity  of 
a  profession. 

Some  of  the  means  that  have  been  foimd  help- 
ful in  improving  the  professional  status  of  the 
teacher  are:  professional  traim'ng,  both  before 
and  during  service;  state  certijScation;  more  per- 
manent tenure ;  skilled  supervision ;  promotion  to 
higher  rank  or  salary  on  the  basis  of  merit;  and 
more  attractive  financial  compensation  for  work 
done. 

Many  educators  and  other  students  of  social 
economy  now  believe  that  the  systematic  provi- 
sion of  retirement  allowances  for  superannuated 
or  otherwise  incapacitated  teachers  will  operate 


INTRODUCTION 

in  a  variety  of  ways  toward  making  teaching  a 
more  attractive  and  a  more  serviceable  calling. 
Confessedly,  many  factors  in  the  situation  are 
yet  obscure,  for  we  know  little  that  is  conclusive 
about  the  problems  of  social  psychology  involved. 
Experience  shows  that  do  public  employment 
will  resolutely  dismiss  faithful  servants  who  have 
become  incapacitated,  if  these  possess  no  re- 
sources to  fall  back  upon.  But  in  no  other  field, 
probably,  is  it  so  hard,  as  it  is  in  the  public-school 
service,  to  find  minor  positions  which  aged  and 
broken  workers  can  take  up,  without  sacrificing 
their  self-respect;  and  certainly  it  would  be  hard 
to  find  a  department  in  which  the  ailing  or 
decrepit  worker  can  do  greater  harm,  than  in 
the  schoolroom  where,  perhaps,  twoscore  eager, 
restless  children,  with  all  their  possibilities  of 
malformation  of  mind  and  character,  must  spend 
precious  years  of  their  lives.  It  is,  therefore,  of 
the  utmost  importance  that  the  teaching  service, 
which  has  now  nearly  five  hundred  thousand 
employees,  and  on  which  is  expended  nearly 
$500,000,000  annually,  should  be  enabled  to 
provide  humane  and  satisfactory  retirement  to 
workers  who  can  no  longer  render  the  grade  of 
service  required.  It  is  useless  to  argue  that 
school  boards  should  retire  unserviceable  teach- 
vi 


INTRODUCTION 

ers,  no  matter  what  their  financial  circumstances 
may  be;  practically,  and  humanly,  they  do  not, 
and  will  not,  do  so. 

Another  object  contemplated  in  a  teachers' 
retirement  system  is  to  give  to  those  still  in  the 
active  period  of  their  service  a  sense  of  security, 
and  opportunity  for  undivided  attention  to  the 
calls  of  the  profession.  Teachers  in  general,  and 
especially  those  most  capable  of  single-minded 
interest  in  the  service,  are,  for  temperamental 
and  other  reasons,  at  a  disadvantage  in  making 
investments,  except  such  as  yield  lowest  returns. 
There  can  be  little  doubt  that  society  will  gain 
by  any  successful  attempt  to  render  the  teacher 
more  secure  as  to  her  future  and  less  preoccu- 
pied with  the  worry  of  business  affairs  during 
active  service.  The  realization  of  such  a  condi- 
tion will  also  weigh  with  those  persons  who  have 
most  to  contribute  to  the  profession  of  teaching, 
and  will  encourage  them  to  enter  and  to  remain 
in  this  caUing. 

In  all  civilized  countries  the  principles  of  com- 
pulsory social  insurance  are  finding  application  in 
public  and  in  private  employment.  Many  care- 
ful students  are  convinced  that  inevitably  social 
insurance  will  soon  prevail  universally.  The 
teaching  profession  is  seemingly  one  of  the  forms 
vii 


INTRODUCTION 

of  employment  to  be  soonest  considered  in  this 
respect. 

Two  fundamental  principles  lie  at  the  bottom 
of  social  insurance.  The  first  is  that  by  each 
individual,  or  on  his  behalf,  during  the'  period 
of  life  when  he  is  capable  of  producing  more 
than  a  bare  subsistence,  provision  shall  be  made 
compulsorily  against  one  or  more  of  such  future 
contingencies  as  death,  accident,  disease,  super- 
annuation, and  unemployment,  whereby  his 
productive  power  is  stopped  or  reduced  to  the 
possible  harm  of  himself  or  those  dependent 
upon  him.  The  second  is  that  the  making  of  this 
provision  shall  be  required  and,  under  some  cir- 
cumstances, assisted  by  the  collective  will  speak- 
ing through  the  State,  which  will  also  guarantee 
the  secure  investment  and  conservation  of  the 
contributions  made  by  the  individual. 

From  the  standpoint  of  these  principles  of 
social  economy  which  underlie  social  insurance, 
the  conditions  surrounding  the  teacher's  profes- 
sion which  seem  to  justify  proposals  for  a  retire- 
ment system  actually  differ  in  degree  only,  and 
not  in  kind,  from  the  conditions  surrounding 
other  public  and  private  callings.  In  the  present 
rapidly  developing  demand  for  more  efficient 
public  education,  it  is,  of  course,  socially  expe- 
viii 


INTRODUCTION 

dient  that  everything  possible  shall  be  done  to 
encourage  the  most  capable  people  to  enter  upon 
teaching  as  a  career,  to  give  to  it  all  the  training 
and  devotion  possible,  to  follow  it  with  undivided 
interest,  and  to  retire  willingly  when  their  effec- 
tiveness shall  have  become  impaired.  Hence, 
the  widespread  popular  interest  in  teachers' 
retirement  systems  at  the  present  time  in  al- 
most all  educationally  progressive  states  in  the 
country. 

In  enacting  legislation  for  teachers'  retirement 
systems  there  is  a  peculiar  need  of  statesmanship 
of  a  high  and  far-seeing  order.  In  few  other 
fields  is  there  so  great  danger  that  immediate  and 
individual  considerations  will  obscure  the  larger 
issues  involved.  It  is  said  that  old  teachers  are 
too  poor  to  make  contributions;  that  teachers  are 
not  paid  what  they  are  worth ;  that  teachers,  not 
yet  old,  but  in  broken  health,  should  be  enabled 
to  retire  on  a  fair  allowance;  that  retirement 
allowances  should  be  sufficient  to  maintain  the 
accustomed  standard  of  Hving ;  that  teachers 
should  not  be  compelled  to  retire  until  they 
themselves  think  they  have  become  inefficient; 
—  these,  and  a  hundred  other  incidental  and 
confficting  considerations,  are  liable  to  over- 
shadow the  main  principles  involved.  Quite 
ix 


INTRODUCTION 

naturally,  in  view  of  the  history  of  pensions,  the 
"straight  pension"  from  the  State  is  the  first 
goal  of  the  teacher's  efforts.  But  as  to-day 
viewed  by  the  best  students  of  social  insurance, 
the  "straight  pension"  from  the  State  is  like  the 
unwise  charity  which  suggested  the  parody  "It 
is  twice  cursed  —  it  curseth  him  that  gives,  and 
also  him  that  takes."  In  the  estimation  of  the 
writer,  at  least,  there  is  imminent  danger  in  the 
disposition  of  teachers'  organizations  to  advo- 
cate the  principle  of  the  non-contributory  retire- 
ment allowance  —  the  so-called  "straight  pen- 
sion." Surely  nothing  will  serve  better  as  an 
index  of  the  professional  character  of  teachers 
and  their  organizations  than  their  ability  to  rise 
superior  to  special  and  temporary  interests 
where  proposals  to  found  a  lasting  system  of 
social  insurance  for  teachers  are  under  considera- 
tion. Vested  rights  seem  to  accrue  dangerously 
fast  here  when  once  legislation  is  enacted,  and  it 
is  long  and  slow  work  to  undo  the  effects  of  a  bad 
system  once  established. 

The  principles  and  laws  described  in  Mr. 
Prosser's  monograph  have  been  developed  only 
after  prolonged  study  and  experimentation. 
That  so  extensive  a  presentation  is  possible  at 
the  present  time  indicates  the  complex  develop- 


INTRODUCTION 

ment  of  the  subject.  It  is  certainly  to  be  hoped 
that  Mr.  Prosser's  careful  work  will  receive  its 
due  consideration  from  those  engaged  in  the 
future  in  promoting  legislation  for  teachers' 
retirement  systems. 


THE  TEACHER  AND  OLD  AGE 


PRESENT  EXTENT  OF  TEACHERS'   PENSIONS 
AND  ANNUITIES  1 

Teachers'  annuities  and  retirement  allowances, 
supported  wholly  or  partly  by  the  public,  have 
been  extensively  developed  in  European  countries 
during  the  last  quarter  of  a  century.  All  the 
states  of  the  German  Empire,  Austria-Hungary, 
Switzerland,  Denmark,  Norway,  Sweden,  Bel- 
gium, France,  together  with  Italy  and  Great 
Britain,  pay  annuities  to  teachers  of  elementary 
schools.  All  of  these  countries,  with  the  addition 
of  Spain,  Portugal,  Greece,  and  Russia,  provide 
pensions  of  one  kind  or  another  for  teachers  of 
secondary  education. 

The  schemes  of  these  nations  differ  widely  as 
to  the  way  in  which  the  annuity  is  supported,  its 

^  Throughout  this  discussion  the  word  "annuity"  is  used  to 
describe  the  retirement  allowance  purchased  in  part  or  entirely 
by  the  contributions  of  the  beneficiary;  "pension"  to  describe 
the  allowance  purchased  entirely  by  those  of  the  public;  "re- 
tirement allowance"  to  include  both  "annuity"  and  "pen- 


THE  TEACHER  AND  OLD  AGE 

amount,  and  the  conditions  as  to  age  and  length 
of  service  under  which  it  is  granted.  In  some 
countries  the  cost  of  these  allowances  is  met  en- 
tirely by  the  public,  and  in  others  in  part  by  as- 
sessments upon  the  teachers,  the  former  being 
the  more  frequent  plan.  The  contribution  of  the 
public  is  met  in  some  cases  by  the  state,  and  in 
others  by  the  joint  support  of  the  state  and  the 
local  community,  the  latter  being  the  usual  prac- 
tice. The  annuity  paid  upon  retirement  varies 
from  ten  to  one  hundred  per  cent  of  the  last  salary 
earned  by  the  beneficiary,  the  average  minimum 
allowance  being  usually  about  one  third  and  the 
average  maximum  about  two  thirds  of  the  teach- 
er's wage  at  the  time  of  retirement.  The  number 
of  years  of  service  which  the  teacher  must  give 
before  he  becomes  eligible  to  an  allowance  be- 
cause of  disability  is  usually  ten,  and  the  age  at 
which  he  may  be  required  to  withdraw  from  the 
service  and  accept  the  annuity  or  pension  is  in 
most  countries  sixty-five  years. 

Protection  is  usually  afforded  against  old  age 
and  incapacity.  In  some  countries,  notably  in 
Germany,  a  part  of  the  claims  of  the  beneficiary 
are  transferred  to  the  wife  and  children.  Mem- 
bership in  the  scheme  is  confined  to  those  who 
are  in  some  way  connected  with  the  profession  of 

2 


TEACHERS'  PENSIONS  AND  ANNUITIES 

teaching.  Distributions  are  made  in  the  form  of 
annuities,  and  never  in  the  form  of  lump  sums. 
The  withdrawal  equity,  whereby  the  teacher  se- 
cures the  return  of  at  least  a  part  of  his  own  con- 
tributions, is  recognized  in  all  the  funds  that  are 
supported  partly  by  dues.  In  general  the  allow- 
ance of  the  teacher  is  larger  when  the  support  is 
joint,  and  a  marked  tendency  in  the  later  schemes 
has  been  to  require  partial  support  of  the  annuity 
by  the  beneficiary,  in  keeping  with  the  spirit  and 
practice  of  compulsory  insurance  against  old  age 
and  invalidism. 

Almost  everywhere  in  Europe  the  state  sys- 
tems of  teachers'  retirement  allowances  are 
strengthened  by  schemes  of  certification  stand- 
ardizing the  qualifications  which  the  employees 
of  the  pubHc  schools  must  have  on  entering  the 
service.  In  this  way  many  of  the  imfit  are  elim- 
inated, who  otherwise  might  be  attracted  to  the 
work  by  the  pension  or  annuity.  Realizing  that 
the  retirement  allowance  succeeds  in  its  purpose 
only  as  it  is  able  to  attract  and  hold  competent 
teachers  in  the  schools,  laws  and  administrative 
regulations  have  been  passed  which  insure  per- 
manent tenure  to  the  capable  instructor,  and 
work  toward  securing  the  dismissal  of  the  incom- 
petent. 

3 


THE  TEACHER  AND  OLD  AGE 

While  the  results  are  necessarily  difi5cult  to 
measure,  the  prevailing  belief  in  European  na- 
tions is  that  retirement  allowances  for  teachers 
are  a  good  business  investment,  because  they 
have  improved  the  teaching  service  in  the  schools 
more  than  would  an  equal  expenditure  in  any 
other  way,  while  at  the  same  time  thrift  has  been 
promoted,  compulsory  saving  has  been  advanced, 
and  the  state  has  protected  itself,  to  some  extent 
at  least,  against  the  social  burden  of  supporting 
some  old  teachers  at  the  close  of  their  period  of 
usefulness  in  the  classroom. 

Retirement  allowances  for  teachers,  like  those 
for  every  other  class,  are,  practically  speak- 
ing, innovations  in  this  country.  The  schemes 
through  which  they  are  supported  and  bestowed 
are  not  only  of  a  variable  type,  but  also  experi- 
mental and  imperfect.  The  areas  in  which  these 
systems  are  in  operation  are  almost  negligible  in 
comparison  with  the  territory  in  which  no  teach- 
ers' retirement  schemes  obtain;  yet,  from  the 
standpoint  of  the  population  and  the  number  of 
teachers  affected,  the  growing  prevalence  of  an- 
nuities and  pensions  to  worthy  teachers  is  start- 
ling to  those  who  have  never  had  the  statistics 
placed  before  them. 

Twenty- three  states  have  legislated,  to  agreater 

4 


TEACHERS'  PENSIONS  AND  ANNUITIES 

or  less  extent,  upon  the  question  of  teachers'  re- 
tirement allowances,  nine  of  which,  having  a 
population  of  almost  twenty- three  million  people 
and  employing  upwards  of  seventy  thousand 
teachers,  have  complete  state  retirement  systems 
covering  every  public-school  teacher  within  their 
boundaries.  Nineteen  of  the  largest  cities  in  the 
country,  having  more  than  one  ninth  of  our  total 
population  and  employing  one  twelfth  of  our 
entire  force  of  public-school  teachers,  support 
teachers'  retirement  ventures  of  varying  type, 
created  and  regulated  by  state  enactment.  More 
than  thirty-five  per  cent  of  our  population  en- 
joy the  educational  benefits  to  be  derived  from 
such  funds,  while  thirty  per  cent  of  the  entire 
teaching  force  of  the  pubhc  schools  of  the  United 
States  have  the  opportunity  to  protect  them- 
selves against  one  or  more  of  the  five  great  risks 
of  life. 

As  has  been  pointed  out,  state- wide  teachers' 
retirement  systems  have  been  set  up  by  ten  states, 
—  Maryland,  New  Jersey,  Rhode  Island,  New 
York,  Virginia,  Arizona,  Vermont,  Maine,  Mass- 
achusetts, and  California.  All  of  these,  save 
Maryland,  Rhode  Island,  Arizona,  and  Maine, 
which  have  pension  schemes  supported  entirely 
by  the  state,  are  ventures  in  compulsory  insur- 

5 


THE  TEACHER  AND  OLD  AGE 

ance,  the  beneficiary  being  required  to  support  the 
fund,  in  part  at  least,  by  dues.  When  this  com- 
pulsory insurance  for  teachers  was  inaugurated, 
membership  was  made  optional  for  those  already 
in  the  service  and  obligatory  for  all  those  entering 
the  service  after  a  given  date.  No  distinction  is 
made  between  old  teachers  and  new  teachers  as  to 
either  dues  or  annuity,  save  in  New  Jersey,  where 
the  new  teachers  are  assessed  two  per  cent  of  their 
salary,  while  the  dues  of  old  teachers  range  from 
two  to  three  per  cent  on  a  sliding  scale  based  on 
years  of  service. 

In  all  of  these  state  systems,  the  benefits  are 
limited  to  those  employed  as  teachers,  usually 
including  supervisors  and  superintendents.  Vir- 
ginia and  Maine  do  not  cover  county  or  city 
superintendents.  In  Maryland,  New  Jersey, 
Rhode  Island,  New  York,  and  Maine,  teachers 
in  state  normal  schools  are  included  in  the 
scheme.  Nowhere  are  employees  of  the  schools, 
other  than  those  engaged  in  teaching  or  the  super- 
vision of  teaching,  recognized.  Everywhere  the 
tendency  in  the  legislation  has  been  to  provide  a 
retirement  allowance  for  all  persons  employed 
in  the  profession  of  teaching  by  schools  sup- 
ported at  public  expense. 

Maryland,  Rhode  Island,  Arizona,  and  Maine 
6 


TEACHERS'  PENSIONS  AND  ANNUITIES 

give  entire  support  to  their  schemes  through  ap- 
propriations from  the  state  treasury  made  from 
time  to  time  when  necessary.  New  York  assesses 
dues  of  one  per  cent  on  the  salary  of  the  teachers, 
meeting  the  remainder  of  the  expense  out  of  the 
state  treasury  supplemented  by  gifts,  donations, 
and  legacies.  Virginia,  with  a  similar  plan,  limits 
to  five  thousand  dollars  the  annual  appropriation 
to  be  made  by  the  legislature,  if  any  appropria- 
tion is  necessary;  and  Vermont,  to  ten  thousand 
dollars.  New  Jersey  has  a  system  of  retirement 
allowances  for  teachers  whereby  the  beneficiary 
practically  supports  a  state  annuity  and  the  state 
pays  a  pension;  the  commonwealth  paying  the 
administrative  expenses  of  the  system,  leaving 
the  teachers  to  maintain  the  annuity  fund  by  an 
assessment  upon  salaries  ranging  from  two  to 
three  per  cent,  supplemented  by  gifts,  donations, 
legacies,  and  the  interest  of  such  invested  funds. 
Maryland  gives  a  straight  pension  of  two  hun- 
dred dollars  per  year.  All  the  others  base  the  re- 
tirement allowance  in  some  way  on  the  teacher's 
salary  at  or  about  the  time  of  retirement.  In 
New  Jersey  the  state  system  calculates  annuities 
on  the  basis  of  sixty  per  cent  of  the  average  an- 
nual salary  for  five  years  preceding  retirement. 
This  annuity  must  not  be  less  than  two  hundred 

7 


THE  TEACHER  AND  OLD  AGE 

and  fifty  dollars  nor  more  than  six  hundred  and 
fifty  dollars.  Local  pension  systems  supported 
entirely  by  the  communities  of  New  Jersey  pay  a 
retired  teacher  a  pension  equal  to  fifty  per  cent 
of  the  average  annual  salary  during  the  last  five 
years  of  service.  New  York,  Rhode  Island,  and 
Virginia  provide  annuities  equal  to  fifty  per  cent 
of  the  average  annual  salary  for  five  years  pre- 
ceding retirement. 

New  York  sets  a  minimum  of  two  hundred 
dollars,  below  which  the  annual  allowance  may 
not  go,  and  no  teacher  can  receive  an  annual 
amount  of  more  than  four  hundred  dollars. 
Rhode  Island  restricts  the  maximum  allowance 
to  five  hundred  dollars.  Virginia  pays  four  hun- 
dred dollars  in  the  case  of  ordinary  teachers  and 
five  hundred  dollars  for  principals.  Maine  pays 
a  flat  pension  of  two  hundred  and  fifty  dollars 
for  thirty-five  years'  service,  two  hundred  dollars 
for  thirty  years'  service,  and  one  hundred  and 
fifty  dollars  for  twenty-five  years'  service  in  the 
state.  In  Arizona  the  state  board  of  education 
may  pension  any  teacher  who  has  served  in  the 
state  twenty-five  years.  The  amount  is  fixed  at 
six  hundred  dollars.  Massachusetts  guarantees  a 
minimum  retirement  allowance  of  three  hundred 
dollars.  All  retirement  allowances  are  annual 
8 


TEACHERS'  PENSIONS  AND  ANNUITIES 

amounts  instead  of  lump  sums,  and  are  distrib- 
uted quarterly. 

In  general,  it  may  be  said  that  only  Virginia 
attempts  to  cover  the  two  great  risks  of  old  age 
and  disability.  Maryland  and  the  state  annuity 
scheme  of  New  Jersey  protect  against  disability 
only,  by  retiring  the  teacher  who  becomes  dis- 
abled or  incompetent:  in  Maryland,  after  serving 
twenty-five  years  in  the  schools  of  the  state  and 
reaching  the  age  of  sixty  years;  in  New  Jersey, 
at  any  time  after  the  expiration  of  twenty  years 
regardless  of  the  age  of  the  beneficiary.  The 
local  pension  scheme  of  New  Jersey  safeguards 
the  old  age  of  the  teacher  by  providing  for  his 
voluntary  retirement  after  thirty-five  years  of 
service  in  the  state ;  Rhode  Island  enables  teach- 
ers to  retire  voluntarily  after  reaching  the  age  of 
sixty  if  they  have  given  thirty-five  years  of  total 
service,  of  which  twenty-five  were  devoted  to  the 
state;  Virginia  affords  an  opportunity  for  volun- 
tary retirement  after  twenty-five  years  of  service 
with  involuntary  retirement  after  twenty  years. 

No  provision  is  made  by  any  of  the  states  for  a 
partial  participation  by  a  teacher  who  becomes 
disabled  for  any  reason  while  in  the  service  at  the 
close  of  five  or  ten  or  even  fifteen  years  of  em- 
ployment. Only  those  who  remain  in  the  service, 

9 


THE  TEACHER  AND  OLD  AGE 

escaping  accident  and  retaining  good  health  for 
the  full  period  required  by  the  law,  are  permitted 
to  benefit  by  the  annuity  or  pension.  In  the  pen- 
sion schemes  of  Maryland  and  Rhode  Island  the 
teacher  who  retires  before  completing  the  period 
of  service  and  reaching  the  age  required  by  law 
has,  of  course,  no  right  to  any  withdrawal  equity 
or  return  of  any  contributions,  since  he  has  made 
none;  but  there  is  no  recognition  of  this  equity  in 
the  annuity  schemes  supported  practically  wholly 
by  the  teachers  in  New  Jersey  or  in  part  by  dues 
in  Virginia  and  New  York. 

New  Jersey  and  Arizona  make  no  requirement 
concerning  the  personal  character  or  record  of 
the  beneficiary.  In  Maryland,  in  Maine,  in  the 
state  annuity  scheme  of  New  Jersey,  and  in  Ver- 
mont, he  must  be  incapacitated  in  order  to  re- 
ceive benefits;  while  in  Virginia  he  must  be  dis- 
abled if  retired  after  twenty  years  of  service,  or 
he  may  retire  voluntarily  after  twenty-five  years. 
In  the  other  states  the  conditions  of  retire- 
ment are  length  of  service  and  age.  Maryland 
requires  the  beneficiary  to  be  sixty  years  of 
age  and  to  have  completed  twenty-five  years  of 
service  within  the  state;  Rhode  Island,  sixty 
years  of  age  and  thirty-five  years  of  service, 
twenty-five  of  these  being  in  the  state;  the  New 
10 


TEACHERS'  PENSIONS  AND  ANNUITIES 

Jersey  state  annuity  system,  no  age,  but  at  least 
twenty  years  of  service  in  the  commonwealth 
before  becoming  incapacitated;  the  New  Jersey 
local  pension  system,  no  age,  but  thirty-five 
years  of  service  within  the  state,  twenty  of  which 
must  have  been  spent  in  the  work  of  the  district 
supporting  the  allowance.  The  annuity  begins 
in  New  York  upon  disability  after  fifteen  years 
of  service;  the  teacher  may  retire  voluntarily 
without  disabihty  at  the  close  of  twenty-five 
years  of  service  and  benefit  by  the  fund.  Massa- 
chusetts requires  at  least  fifteen  years  of  service. 
prior  to  July  i,  1914,  and  thirty  years'  service 
from  teachers  entering  the  service  after  that  date. 
Teachers  must  be  sixty  years  of  age,  or  over,  at 
time  of  retirement. 

The  state  pension  systems  of  Maryland,  Rhode 
Island,  Arizona,  and  Maine,  carried  on  entirely 
at  public  expense,  are  controlled  entirely  by  the 
public  through  the  state  board  of  education  for 
each  commonwealth.  Virginia  alone  fails  to  give 
the  teachers  who  contribute  to  a  state  annuity 
scheme  any  voice  in  its  control  and  administra- 
t'on,  the  management  there  being  likewise  in- 
vested in  the  state  board  of  education.  In  the 
New  Jersey  state  annuity  system  the  joint  repre- 
sentation of  the  teachers  and  the  public  is  secured 
II 


THE  TEACHER  AND  OLD  AGE 

through  a  board  of  trustees  of  the  retirement 
fund,  composed  of  nine  members,  five  of  whom  are 
elected  by  the  teaching  membership  of  the  fund  in 
annual  convention,  and  four  of  whom  represent 
the  public,  appointed  by  the  governor.  The  state 
annuity  fund  of  New  York  is  administered  by  a 
retirement  fund  board  consisting  of  five  members, 
appointed  by  the  commissioner  of  education, 
three  of  whom  must  be  members  of  the  teaching 
profession  and  one  of  whom  must  be  a  woman. 

Some  states  have  passed  what  might  be  called 
permissive  laws,  allowing  cities  and  towns  to 
set  up  local  pension  schemes  for  the  benefit  of 
their  own  schools  and  teachers.  In  1908  Massa- 
chusetts authorized  all  cities  and  towns  other 
than  Boston,  if  the  voters  approve  at  popular 
election,  to  pay  pensions  from  pubhc  funds,  and 
Boston  has  a  retirement  allowance  system  regu- 
lated by  state  law.  Pennsylvania  authorizes 
cities  in  the  second  and  third  classes  to  establish 
retirement  funds,  and  apparently  to  appropriate 
public  money  therefor;  and  Minnesota  provides 
that,  in  cities  of  over  fifty  thousand  inhabitants, 
funds  for  retirement  may  be  raised  in  part  by 
taxation. 

In  Ohio  the  board  of  education  of  any  district 
may  establish  a  pension  fund;  participation  is 
12 


TEACHERS'  PENSIONS  AND  ANNUITIES 

optional  with  teachers,  and  the  funds  are  to  be 
derived  in  part  from  salary  deductions  and  in 
part  from  the  appropriation  of  from  one  to  two 
per  cent  of  the  gross  receipts  of  the  said  board 
from  taxation.  California  and  Utah  have  retire- 
ment laws  which  are  similar,  inasmuch  as  they 
are  local  and  voluntary  in  their  appHcation,  and 
are  based  largely  upon  assessments,  the  only  pro- 
vision for  contribution  from  public  funds  relat- 
ing to  certain  amounts  forfeited  by  teachers  for 
absence,  etc.  In  Colorado,  districts  containing  a 
school  population  of  over  one  thousand  may  es- 
tablish public-school  teachers'  retirement  funds, 
and  may  levy  therefore  taxes  not  exceeding  one 
tenth  of  a  mill. 

In  addition  to  these  there  are  local  pension 
funds  in  twenty  of  the  leading  cities.  Some  of 
these,  authorized  by  law,  are  supported  entirely 
by  the  public,  some  jointly  by  the  state  and  the 
teaching  force,  but  most  of  them  principally,  if 
not  entirely,  by  the  assessments  of  teachers  for 
their  own  mutual  aid  associations. 

These  annuity  schemes  present  the  same  wide 
differences  as  to  methods  of  support,  the  amount 
of  premium  and  annuity,  and  the  conditions  of 
retirement  and  participation  which  characterize 
the  state  pension  systems  already  described.  The 

13 


THE  TEACHER  AND  OLD  AGE 

assessments  paid  by  the  teachers  range  from  one 
to  three  per  cent;  the  annuity  in  most  cases  is 
small,  being  usually  from  two  hundred  to  three 
hundred  dollars;  the  number  of  years  the  teacher 
must  spend  in  the  work  is  usually  large,  thirty 
to  thirty-five  years;  and  the  age  at  which  retire- 
ment upon  the  pension  may  take  place,  high, 
sixty-five  to  seventy  years.  Teachers  leaving  the 
service  before  retirement  are  usually  not  given 
a  return  of  any  part  of  the  amount  which  they 
have  contributed  as  dues. 

General  character  of  present  schemes  for  the 
insurance  of  teachers  in  America 

We  have  not  had  teachers'  retirement  allow- 
ances in  this  country  long  enough  to  be  able  to 
estimate,  in  any  conclusive  way,  at  least,  their 
results  upon  the  work  of  the  schools  and  the  pro- 
fession. The  progress  which  the  movement  has 
made  would  seem  to  indicate  that  the  American 
people  are  being  rapidly  committed  to  the  idea. 
While  this  is  true,  it  must  at  the  same  time  be 
acknowledged  that  not  only  are  the  present 
schemes  of  teachers'  insurance  experimental  and 
imperfect,  but  they  have  frequently  been  the 
outcome  of  hasty  and  ill-considered  action.  It 
is  doubtful  whether  many  of  them  will  result 

14 


TEACHERS'  PENSIONS  AND  ANNUITIES 

in  the  best  good  of  education  and  of  the  teachers 
themselves. 

Most  of  these  retirement  systems  have  been 
entered  into  without  any  accurate  knowledge  as 
to  what  the  insurance  would  cost  and  whether 
the  support  provided  would  float  the  venture 
properly  so  as  to  safeguard  contributions  and 
insure  the  expectancies  of  members  and  the 
claims  of  beneficiaries.  In  only  a  very  few  in- 
stances has  the  expert  advice  of  the  actuary  been 
secured  as  to  whether  a  plan  was  sound  and  sol- 
vent before  its  adoption.  Some  of  the  schemes 
established  within  the  last  five  years  have  al- 
ready been  declared  by  actuaries  of  repute  to  be 
insolvent,  and  therefore  unable  to  meet  the  claims 
upon  them  certain  to  come.  The  result  will  be  in 
such  cases  that,  unless  additional  legislation  is 
enacted,  many  teachers  will  fail  to  receive  the 
protection  which  they  expect,  and  in  the  contrib- 
utory ventures  will  lose  the  benefit  of  the  dues 
or  savings  they  have  been  required  to  invest. 

In  all  the  American  schemes,  both  old  and 
new  teachers  have  been  provided  for  in  the  same 
law  and  fund,  a  practice  which  has  resulted  in 
retirement  systems  not  properly  adapted  to  the 
conditions  of  either,  and  therefore  not  produc- 
tive of  the  best  good  to  the  schools  in  which  they 

IS 


THE  TEACHER  AND  OLD  AGE 

serve.  The  dominant  purpose  has  usually  been 
to  make  arrangements  for  the  immediate  retire- 
ment, upon  some  kind  of  an  allowance,  of  those 
who,  through  age  or  incapacity,  were  no  longer 
able  to  discharge  properly  the  duties  of  the  class- 
room, thus  affording,  through  a  gratuity  more 
or  less  meager,  a  means  whereby  school  authori- 
ties could  without  embarrassment  and  criticism 
retire  old  and  faithful  employees  on  superannua- 
tion allowances. 

Where  the  retirement  fund  is  supported  in  part 
by  the  contributions  of  the  teacher,  it  has  been 
customary  so  to  arrange  the  plan  that  teachers 
already  in  the  service  receive  full  annuities,  but 
pay  dues,  usually  at  the  same  rate  as  new  teach- 
ers, only  for  the  time  they  remain  in  the  service 
after  the  adoption  of  the  scheme;  while  at  the 
same  time  young  teachers  withdrawing  from  the 
service  to  take  up  other  work  are  made  to  pay 
for  the  protection  of  those  remaining  in  it,  by 
forfeiting  all  the  assessments  they  have  contrib- 
uted. 

Where  the  contributory  principle  has  been 
recognized,  assessments  have  usually  been  made 
upon  the  teacher  for  the  avowed  purpose  of  help- 
ing to  pay  the  expense  of  the  venture  and  not  as 
a  vital  feature  of  a  plan  of  social  insurance.  The 
i6 


TEACHERS'  PENSIONS  AND  ANNUITIES 

idea  of  compulsory  saving  is  seldom  mentioned, 
and  even  less  frequently  followed  out  consist- 
ently. There  is  no  logical  relation  in  most  in- 
stances between  what  the  teacher  pays  and  what 
he  receives. 

Nowhere  is  there,  as  in  the  Massachusetts 
retirement  system  for  state  employees  (1910) 
and  in  the  Massachusetts  retirement  system  for 
teachers  (19 13),  a  return  to  the  teacher  of  an 
annuity  purchased  by  his  own  accumulated  sav- 
ings which  the  state  has  withheld  as  dues  and 
an  additional  pension  given  by  the  state  as  a 
reward  for  thrift,  exactly  equal  in  amount  to  the 
annuity.  On  the  contrary,  payments  by  the 
teacher  are  practically  everywhere  regarded  not 
as  deferred  payments  of  salary  invested  for  his 
benefit  by  the  public  as  employer,  but  as  pre- 
miums in  an  insurance  benefit  to  be  received  by 
him  in  case  he  remains  faithful  to  the  service  for 
a  required  time,  to  be  forfeited  entirely  by  death 
or  by  withdrawal  for  any  cause. 

Taking  all  the  American  attempts  to  deal  with 
the  question  of  teachers'  allowances,  it  may  be 
said,  however,  that  their  evolution,  their  ten- 
dency, as  is  shown  more  especially  in  the  later 
schemes,  is  toward  joint  support  by  public  and 
teacher;  state  rather  than  local  maintenance  and 

17 


THE  TEACHER  AND  OLD  AGE 

support;  compulsory  saving  on  the  part  of  the 
beneficiary;  the  recognition,  to  some  extent  at 
least,  of  the  right  of  the  member  to  a  return  of 
his  own  contributions;  dues  graduated,  within 
certain  limits  at  least,  according  to  salary;  an- 
nuities, up  to  a  reasonable  point  at  least,  given 
in  proportion  to  dues;  public  support  in  encour- 
agement of  individual  saving;  and  in  the  con- 
tributory schemes  joint  control  and  management 
by  the  public  and  the  members.  Nowhere  else 
has  there  been  any  American  system  for  the  re- 
tirement of  pubHc-school  teachers  based  squarely 
on  accepted  principles  of  compulsory  social  in- 
surance such  as  have  been  carried  out  in  the 
Massachusetts  retirement  system  for  state  em- 
ployees and  in  the  Massachusetts  retirement 
system  for  teachers  (1913)- 


II 


TEACHERS'   ANNUITIES   AS    PART    OF   A 
PROGRAM  OF  SOCIAL  INSURANCE 

The  cause  of  teachers'  pensions  has  of  late 
years  gained  additional  support  from  the  grow- 
ing recognition  that,  after  all,  they  are  only  one 
phase  of  the  world-wide  movement  toward  the 
social  insurance  of  all  workers  against  the  great 
risks  of  life.  Here  again  the  Old  World  has 
blazed  the  way.  Practically  every  European  na- 
tion has  passed  some  legislation  safeguarding  a 
part  of  its  workers  at  least  against  one  or  more  of 
the  risks  of  sickness,  accident,  disability,  old  age, 
and  death.  In  every  one  of  these  countries,  with 
the  single  exception  of  Holland,  which  as  yet  has 
only  adopted  the  idea  of  compulsory  insurance 
of  industrial  workers  against  sickness,  teachers' 
annuities  of  one  kind  or  another  have  in  most 
instances  preceded,  as  a  forerunner  or  entering 
wedge,  a  wider  social  program  of  legislation  for 
the  protection  of  other  and  larger  groups  of 
workers;  while  in  other  instances  insurance  for 
the  teacher  has  paralleled  similar  legislation  for 
other  classes  of  citizens. 
19 


THE  TEACHER  mD  OLD  AGE 

Almost  everywhere  in  Europe  voluntary  insur- 
ance, designed  primarily  for  the  benefit  of  wage- 
earners,  but  open  to  every  one,  is  made  safe  and 
cheap  by  public  management  and  subvention, 
being  sustained  by  the  premiums  of  the  insured 
and  grants  from  the  state.  Its  counterpart  would 
occur  here,  should  a  state  offer  to  receive  and  in- 
vest contributions  from  its  citizens,  supplement 
these  with  small  appropriations  from  the  legisla- 
ture, and  guarantee  a  certain  annuity  when  in- 
firmity, old  age,  or  death  overtook  the  insured. 

In  the  early  schemes  for  the  protection  of 
teachers  in  many  European  nations,  as  has  al- 
ready been  pointed  out,  straight  pensions  were 
given  as  a  gratuity  or  bonus  by  the  state  without 
the  payment  of  any  dues  or  assessments,  whereas 
all  the  later  ventures  provide  for  the  joint  sup- 
port by  the  pubHc  and  the  schoolmaster.  This  is 
the  pronounced  drift  on  the  other  side  in  all  re- 
cent laws  relating  to  old-age  or  disabihty  insur- 
ance. Even  Germany,  after  having  granted  pen- 
sions to  teachers  entirely  at  pubhc  expense,  has 
in  recent  years  based  her  entire  program  of  social 
insurance  upon  the  idea  of  the  compulsory  as- 
sessment of  all  who  were  to  be  protected  by  the 
numerous  successive  and  progressive  laws  which 
have  been  adopted. 

20 


ANNUITIES  AND  SOCIAL  INSURANCE 

Five  out  of  the  eleven  leading  European  coun- 
tries have  set  up  compulsory  and,  of  course,  con- 
tributory insurance  schemes  for  large  numbers 
of  wage-earners,  and  three  others  are  soon  to 
adopt  the  same  idea;  whereas,  on  the  other  hand, 
only  three  countries  have  adopted  old-age  pen- 
sions supported  entirely  by  public  funds,  and 
these  have  not  only  limited  the  benefits  to  a 
mere  pittance,  but  restricted  their  enjoyment  to 
the  needy,  the  crippled,  and  the  diseased.  We 
shall  probably  witness  a  spread  of  old-age  pen- 
sions, as  a  new  and  wise  form  of  protection  for 
the  indigent,  to  other  lands  on  both  sides  of  the 
Atlantic,  but  probably  not  for  self-supporting 
classes  of  our  citizenship,  whether  employed  in 
private  or  public  service.  In  all  European  coun- 
tries the  pension  or  annuity  scheme  of  the  teacher 
is  carried  on  as  an  enterprise  by  the  state  as  em- 
ployer, separate  and  apart  from  the  compulsory 
insurance  systems  for  the  protection  of  other 
classes  of  workers. 

The  membership  of  the  insurance  schemes 
against  old  age  and  invalidism  varies  in  differ- 
ent countries.  Austria  protects  office  employees 
and  minors;  France,  seamen,  minors,  all  working- 
men  and  salaried  employees ;  Germany,  all  wage- 
earners  and  employees  with  yearly  wages  up  to 
21 


THE  TEACHER  AND  OLD  AGE 

five  hundred  dollars,  and  small  employees  and 
houseworkers ;  Norway  is  now  considering  a 
plan  covering  all  working  men  and  women,  irre- 
spective of  income.  This  is  the  pronounced  drift 
in  all  European  legislation  on  the  subject. 

The  spirit  and  the  tendency  of  European  so- 
cial insurance  are  best  shown  in  the  complete 
system  for  the  protection  of  workers  which  Ger- 
many has  worked  out,  by  assessing  employers  for 
the  entire  support  of  the  annuities  for  accident 
and  for  the  partial  support  of  those  for  old  age 
and  disability.  The  principles  are  asserted,  both 
that  the  cost  of  these  risks  is  a  legitimate  over- 
head charge  against  the  business,  the  same  as 
insurance  against  fire  and  repairs  for  wear  and 
tear  upon  plant  and  machinery,  and  that  a  busi- 
ness profits  indirectly  by  the  moral  effect  of  these 
safeguards  upon  the  wage-earner. 

By  assessing  wage-earners  for  the  support  of 
the  fund  protecting  them  against  old  age  and 
incapacity,  the  principle  is  asserted  that  work- 
ingmen,  for  the  sake  of  their  own  welfare, 
should  be  required  to  protect  themselves  against 
the  uncertainties  of  life  and  provide  for  their 
failing  years.  By  making  it  possible  to  retire 
the  aged  worker  when  he  has  outlived  his  effi- 
ciency, the  principle  has  been  asserted  that  the 

22, 


ANNUITIES  AND  SOCIAL  INSURANCE 

state  must  in  some  equitable  way  make  provi- 
sion for  his  retirement  when,  after  he  has  passed 
the  Hmit  of  efi&ciency,  his  retention  in  industry 
means  an  economic  waste  to  society  and  a  handi- 
cap to  the  industry  in  which  he  is  employed. 
By  requiring  all  classes  of  wage-workers  to  pay 
something  to  the  support  of  their  own  protec- 
tion, the  principle  is  asserted  that  the  state,  in 
order  to  promote  the  thrift  of  its  people  and 
preserve  itself  from  the  burden  of  the  indigent, 
must  encourage  thrift,  stimulate  and  safeguard 
savings,  and  secure  continuous  faithful  service 
to  industry  and  to  the  nation. 

No  American  state  thus  far  has  established 
any  general  system  of  old-age  pensions  or  annu- 
ities. There  are  in  operation  in  several  states 
special  pension  schemes  for  certain  classes  of 
public  employees,  chiefly  pohcemen,  firemen, 
and  school-teachers.  There  is  no  scheme,  now  in 
existence  or  in  prospect,  making  general  provi- 
sion for  old-age  pensions  or  insurance.  Indeed, 
Massachusetts  is  the  first  state  to  authorize  a 
comprehensive  investigation  into  the  pension 
and  insurance  question  through  a  state  commis- 
sion, which  reported  to  the  legislature  on  the  ist 
of  January  three  years  ago.  In  the  United  States 
the  question  of  retirement  allowances  has  hardly 

23 


THE  TEACHER  AND  OLD  AGE 

as  yet  received  any  serious  attention  from  legis- 
lation, while  in  Europe  it  has  been  the  subject  of 
repeated  investigation  and  extensive  legislation. 
At  the  same  time  there  has  been  a  steady  de- 
velopment of  industrial  insurance.  The  frater- 
nal organizations  and  the  trade  unions  have  con- 
tributed also  some  share  toward  the  solution  of 
this  problem.  The  pension  systems  for  certain 
branches  of  pubHc  service,  to  which  reference  has 
already  been  made,  have  assisted  further  toward 
this  end. 

The  essential  difference  between  the  United 
States  and  countries  in  which  compulsory  insur- 
ance has  obtained  a  foothold  has  been  the  ab- 
sence in  this  country  of  recognition  of  any  need 
for  this  form  of  protection  for  its  inhabitants,  and 
particularly  for  those  nearest  to  the  border-line 
between  economic  independence  and  economic 
dependence.  In  certain  instances,  however,  we 
have  adopted  the  compulsory  principle  in  our 
own  legislation.  Laws  are  daily  being  enacted, 
miscalled  socialistic  or  paternal,  which  on  closer 
analysis  are  found  to  be  no  more  than  an  expres- 
sion of  intention  on  the  part  of  the  state  to  safe- 
guard the  welfare  of  all  citizens,  irrespective  of 
their  economic  status. 

Fundamentally,  no  more  than  this  has  been 

24 


ANNUITIES  AND  SOCIAL  INSURANCE 

done  in  Germany  and  other  European  countries 
which  have  introduced  compulsory  insurance. 
These  have  recognized  that  there  are  risks  in  hfe 
common  to  all  workingmen,  against  which  it  is 
impossible  for  the  individual  alone  to  make  pro- 
vision. Only  by  the  transfer  of  this  risk  from  the 
shoulders  of  the  one  to  the  backs  of  the  many 
and  by  placing  the  burden  of  cost  where  it  should 
rest,  even  though  this  involve  the  industry  itself, 
can  equilibrium  be  maintained.  Where  we,  after 
an  observation  of  a  century,  and  England,  of 
several  centuries,  have  grudgingly  admitted  the 
desirability  of  protection  through  insurance  and 
through  legislation  and  have  permitted  individ- 
uals to  avail  themselves  of  the  benefits  of  it, 
Europe,  as  typified  by  Germany  and  her  sister 
states,  has  boldly  declared  the  urgent  need  of 
this  protection,  not  for  the  few  but  for  all  of  its 
working  population,  and  by  legislation  has  re- 
quired its  workingmen  to  partake  of  it  and  its 
employers  to  bear  their  just  share  of  the  cost. 

What  Massachusetts  has  done  with  social 
insurance 

Massachusetts  has  been  one  of  the  first  of  the 
states  to  deal  with  the  protection  of  workers 
against  the  risks  of  life  in  various  ways.  The 

25 


THE  TEACHER  AND  OLD  AGE 

Report  of  the  Massachusetts  Commission  on  Old- 
Age  Pensions,  in  1910,  pointed  out  that  previous 
laws  had  already  opened  the  way  for  pensions 
for  various  public  employees.  By  referendum 
vote,  any  city  or  town  may  pension  firemen  for 
permanent  disability  incurred  in  the  service ;  any 
fireman  who  has  served  twenty  years  and  who  is 
sixty-five  years  of  age  or  who  is  incapacitated  for 
service  may  be  pensioned;  poHcemen  disabled  in 
the  discharge  of  their  duty  may  be  retired  on 
half-pay,  and  twenty  years  of  service  with  dis- 
ablement for  any  cause  entitles  them  to  pension, 
regardless  of  age. 

Widows  and  children  of  firemen  and  police- 
men killed  in  the  service  receive  pensions  to  the 
amount  of  not  more  than  three  hundred  dollars 
per  year.  Any  judge,  who  has  reached  the  age 
of  sixty  years,  has  served  fifteen  years,  and  is 
incapacitated  for  further  service,  may  retire  on 
one-half  salary;  veterans  of  the  Civil  War,  no 
longer  able  after  ten  years  in  the  public  service 
to  discharge  their  duties,  may  be  retired  on  half- 
pay;  any  prison  officer  may  be  retired  on  one 
half  the  last  rate  of  compensation  paid  him  when 
he  is  sixty-five  years  of  age  and  has  served  twenty 
years,  or  when  he  is  disabled  in  the  service,  or 
has  rendered  thirty  years  of  faithful  service. 
26 


ANNUITIES  AND  SOCIAL  INSURANCE 

In  1908,  by  chapter  498  of  Acts  and  Resolves, 
cities  and  towns  were  authorized  to  establish  pen- 
sion funds  for  teachers  in  the  pubhc  schools.  Any 
city  or  town  accepting  its  provisions  shall  estab- 
lish a  fund  for  retiring  teachers,  made  up  of  such 
revenues  as  may  be  diverted  to  that  purpose. 
The  school  committee  may  retire  any  teacher  of 
sixty  years  of  age,  incapacitated  for  service,  on  a 
pension  not  to  exceed  one  half  of  his  last  com- 
pensation, and  in  any  case  not  exceeding  five  hun- 
dred dollars.  In  the  same  year  a  pension  system 
for  teachers  in  the  public  day  schools  of  Boston 
was  established  by  chapter  589,  under  which  the 
school  committee  o,f  Boston  was  required  to  es- 
tablish immediately  a  permanent  school  pension 
fund. 

An  appropriation  of  five  cents  for  each  one 
thousand  dollars  of  the  valuation  of  the  city  is 
authorized  to  meet  the  expenses  of  the  scheme. 
Any  teacher  who  is  incapacitated  for  efficient 
service  may  be  retired  at  any  time;  those  who 
have  reached  the  age  of  sixty-five  years  or  who 
have  been  in  the  service  for  thirty  years,  twenty 
of  which  have  been  in  the  pubhc  day  schools 
of  Boston,  receive  a  pension  of  one  hundred 
and  eighty  dollars,  the  amount  of  the  pension 
for  those  of  lower  age  and  shorter  service  being 
27 


THE  TEACHER  AND  OLD  AGE 

proportionately  less.  In  1913  the  General  Court 
enacted  a  state  compulsory  insurance  act  for 
teachers,  which  is  later  discussed  in  detail. 

By  the  Savings  Insurance  Act  of  1907,  Massa- 
chusetts is  definitely  committed  to  an  experiment 
with  voluntary  insurance  under  public  adminis- 
tration. 

Upon  the  recommendation  of  the  Commission 
on  Old-Age  Pensions,  made  in  1910,  the  legisla- 
ture passed  an  act  providing  compulsory  instruc- 
tion in  thrift  in  the  public  schools  of  the  com- 
monwealth ;  authorized  employers  and  employees 
to  carry  on  cooperative  retirement  annuity  or 
pension  systems;  permitted  cities  and  towns  to 
set  up  retirement  schemes  for  their  own  em- 
ployees; and  established  a  retirement  plan  for 
the  employees  of  the  commonwealth ;  and  in  addi- 
tion to  this,  passed  a  Workingmen's  Compensa- 
tion Act  to  take  the  place  of  the  old  Employers' 
Liability  Law. 

The  retirement  system  now  in  operation  for 
state  employees  contemplates  practically  that 
the  beneficiary  shall  make  certain  contribu- 
tions, which  invested  at  compound  interest  shall 
after  a  certain  period  make  available  an  an- 
nuity, and  that  the  state  shall  come  in  to  sup- 
plement this  with  a  pension  of  equal  amount. 
28 


ANNUITIES  AND   SOCIAL  INSURANCE 

Under  these  circumstances,  therefore,  the  retire- 
ment allowance  practically  amounts  to  the  pro- 
ceeds of  a  system  of  compulsory  insurance 
against  old  age  or  incapacity  to  which  the  state 
contributes  as  much  as  the  beneficiary,  and  the 
retirement  allowances  themselves  are  graduated 
largely  according  to  the  salaries  paid  beneficia- 
ries, and  therefore  according  to  the  contributions 
which  each  makes  to  the  support  of  his  own  an- 
nuity. 

It  is  significant  that  Massachusetts,  which  has 
placed  practically  all  its  employees  under  civil 
service  provisions  with  a  permanent  tenure  of 
position,  is  the  only  state  which  has  yet  estab- 
lished an  annuity  plan  for  them. 


Ill 


THE    QUESTION   OF    TEACHERS'   RETIREMENT 

ALLOWANCES   IN  THE  LIGHT  OF  SOCIAL 

INSURANCE  PRINCIPLES 

In  view  of  the  trend  of  legislation  and  the 
growth  of  public  sentiment  in  this  country  for 
social  insurance,  it  seems  clear  that  retirement 
allowances  here  should  not  be  dealt  with  merely 
as  an  effort  to  provide  protection  against  the 
risks  of  life  for  the  members  of  a  worthy  profes- 
sion or  for  a  group  of  employees  in  the  public  serv- 
ice, but  as  one  phase  of  a  widening  program  of 
insurance  for  all  workers.  No  state  is  now  ready 
for  such  a  program  in  its  larger  aspects,  but  it  is 
evident  that  retirement  allowances  are  here  and 
now  demanded  for  the  teaching  service  by  an 
increasing  number  of  the  friends  of  the  public 
schools.  We  are  now  facing  the  question:  Shall 
a  state-wide  system  of  annuities  for  teachers  be 
established  ? 

In  considering  the  idea  of  teachers'  retirement 

allowances,  three  different  interests  or  points  of 

view  need  to  be  kept  in  mind.  There  is,  first,  the 

attitude  of  the  teacher  interested  in  the  question 

30 


RETIREMENT  ALLOWANCES 

whether  pensions  or  annuities  of  this,  that,  or 
the  other  kind  will  be  for  the  good  of  the  profes- 
sion to  which  he  belongs.  The  public,  as  an  em- 
ployer anxious  for  the  welfare  of  its  schools,  is 
asked  to  support  a  retirement  system  on  the  plea 
that  it  will  better  the  work  of  the  schools.  The 
state  should  look  upon  the  idea  of  pensions  or 
annuities  for  educators  as  one  form  of  social 
insurance  which,  whatever  else  it  does,  must 
encourage  saving,  promote  thrift,  and  insure 
adequate  protection  against  old  age  and  disa- 
bility. 

If  the  teachers  of  any  state  advocate  any  sys- 
tem whereby  the  state  or  the  community  is  ex- 
pected to  make  contributions  to  a  retirement 
system,  they  will  do  so  primarily  with  the  ulti- 
mate good  of  the  profession  in  view.  The  ulti- 
mate good  of  the  teaching  profession  is  governed 
almost  wholly  by  considerations  of  the  efficiency 
of  that  profession  in  performing  its  services  to 
society;  consequently  nearly  all  of  the  problems 
affecting  teachers'  retirement  allowances  come 
back  ultimately  to  the  fundamental  one:  How 
and  in  what  ways  will  a  particular  proposal  react 
upon  the  efficiency  of  the  profession  as  a  whole? 
For  this  reason  it  is  advisable  that  the  prob- 
lem of  providing  retirement  allowances  for  new 

31 


THE  TEACHER  AND  OLD  AGE 

teachers  hereafter  entering  the  profession  and  for 
those  already  in  the  service  should  be  considered 
separately  and  be  met  by  different  measures.  In 
this  way  it  is  possible  to  lay  aside  temporarily 
special  considerations  that  arise  with  reference 
to  teachers  who  have  already  given  many  years 
of  service  to  the  schools. 

The  state  could  easily  insist  on  a  retirement 
system  for  teachers  hereafter  entering  the  serv- 
ice, but  it  would  be  inexpedient  to  make  such 
provision  compulsory  with  regard  to  teachers 
now  in  the  service.  A  contributory  feature  in  a 
retirement  system  would  not  work  a  hardship 
to  teachers  hereafter  beginning  work,  since  they 
would  face  such  an  assessment  at  the  time  of 
employment;  but  it  might  in  some  cases  operate 
as  a  hardship  to  teachers  who  have  already  for 
many  years  been  employed  in  public  schools. 
Sound  policy  would  require  that  teachers  here- 
after entering  the  service  and  expecting  to  share 
in  the  benefits  of  a  retirement  system  should  not 
only  be  certificated  by  the  state,  but  the  gen- 
eral character  of  their  work  from  time  to  time 
should  be  passed  upon  by  state  authorities.  It 
is  much  easier  to  deal  with  legislation  affecting 
tenure  in  the  case  of  new  teachers  than  in  that  of 
old.  All  of  these  problems  are  exceedingly  com- 
32 


RETIREMENT  ALLOWANCES 

plex  as  applied  to  teachers  now  in  the  service,  but 
relatively  simple  if  considered  in  connection  with 

those  who  may  hereafter  elect  to  enter  the  pro- 
fession of  teaching. 

Principles  upon  u'liich  a  retirement  allowance 
should  be  based 

Whatever  may  be  the  claims  advanced  by 
those  who  favor  retirement  allowances  for  them, 
teachers  as  a  class  have  come  to  realize  that  the 
only  argument  which  will  avail  with  the  public 
and  secure  legislation  in  their  behalf,  is  that  the 
protection  given  the  teacher  through  annuities 
will  better  the  work  of  the  pubhc  schools.  It 
goes  without  saying  that  an  overwhelming  ma- 
jority of  the  teachers  of  the  country  view  the 
question  from  a  professional  standpoint  and  de- 
sire only  such  legislation  as  will  be  for  the  good 
of  the  profession  and  the  improvement  of  the 
service.  In  what  specific  ways  may  we  expect  the 
operation  of  a  retirement  system  to  improve  the 
efficiency  of  teachers?  By  attracting  and  hold- 
ing more  desirable  men  and  v/omen  in  the  profes- 
sion; by  guaranteeing  in  a  way  the  future  of  those 
engaged  in  it,  thus  creating  an  attitude  of  mind 
favorable  to  good  work;  by  the  timely  with- 
drawal of  those  who  have  given  full  service  and 

33 


THE  TEACHER  AND  OLD  AGE 

are  no  longer  able  to  meet  the  demands  of  the 
schoolroom. 

The  European  experience  shows  that  teach- 
ers' retirement  allowances  have  accomplished 
these  results  far  better  than  if  many  times  their 
cost  to  the  public  had  been  applied  to  an  increase 
in  wage.  Teachers'  retirement  allowances  are  in 
a  sense  deferred  payments  for  services,  which 
justify  themselves  as  a  wise  business  investment 
on  the  part  of  the  state.  In  addition,  it  seems 
probable  that  annuities  holding  the  beneficiary 
longer  in  the  service  would  insure  a  more  per- 
manent staff  of  teachers  and  tend  to  increase 
the  length  of  the  tenure  of  employment,  a  move 
in  the  direction  of  a  wider  civil  service  in  the 
profession. 

There  is  danger  in  some  quarters  to-day  that  a 
few  of  the  over-zealous  friends  of  teachers'  an- 
nuities may,  forgetting  their  real  justification, 
support  arguments  as  to  retirement  allowances 
which,  if  not  false  and  misleading,  do  not  go  to 
the  real  merits  of  the  question. 

It  is  sometimes  urged  that  teaching  is  an  un- 
derpaid profession.  This  statement,  however, 
must  be  examined  always  in  the  light  of  stand- 
ards under  prevalent  conditions.  The  teachers 
in  the  city  are  paid  much  better  salaries  than 

34 


RETIREMENT  ALLOWANCES 

those  in  the  country,  but  living  conditions  in  the 
city  are  more  costly  than  those  in  the  country. 
Teachers  in  the  Western  States  are  as  a  rule  paid 
better  than  those  in  Eastern  States,  but  in  the 
West  there  is  a  relative  scarcity  of  people  seeking 
to  enter  this  calling,  whereas  in  the  East  there 
seems  to  be  usually  a  considerable  surplus  of 
available  candidates  for  positions. 

Those  employing  teachers  assert  that  there  is 
a  constant  scarcity  of  those  who  have  had  ade- 
quate training  or  approved  experience,  and  those 
towns  paying  the  highest  salaries  claim  that  they 
find  it  most  difficult  to  procure  people  reach- 
ing the  standard  of  excellence  which  they  desire. 
Obviously,  then,  if  teaching  is  underpaid,  it  is  so 
relatively,  not  as  contrasted  with  the  supply  of 
candidates  available  at  any  given  time,  but  as 
determined  by  the  standards  of  employment 
which  prevail.  The  so-called  "disappearance" 
of  men  from  the  teaching  profession  is  not  due 
to  the  fact  that  the  same  men  find  better  em- 
ployment elsewhere,  but  rather  it  is  due  to  the 
fact  that  the  rise  of  the  standards  of  profes- 
sional quality  demanded  render  it  less  and  less 
possible  for  communities  to  obtain  the  type  of 
man  desired. 

The  increased  cost  of  living  in  recent  years  is 

35 


THE  TEACHER  AND  OLD  AGE 

sometimes  urged  as  an  argument  in  aid  of  teach- 
ers' retirement  allowances.  This  argument  again 
fails  to  recognize  that  the  increased  cost  of  living 
affects  practically  all  classes  of  workers,  and  per- 
haps in  equal  degree,  although  it  seems  probable 
that  salaries  do  not  keep  pace  with  the  upward 
trend  of  prices  as  adequately  as  do  the  wages 
of  the  skilled  workman.  Teachers'  salaries  have 
advanced  in  recent  years,  but  whether  they  have 
advanced  proportionately  to  the  compensation 
given  in  other  callings  is  a  fact  that  is  not  yet 
proved.  It  may  be  assumed  that  conditions  of 
competition  operate  in  teaching  as  well  as  in 
other  fields,  and  certainly  the  increased  cost  of 
living,  as  contrasted  with  the  compensations  of 
teaching,  do  not  seem  to  operate  in  such  a  way  as 
to  bar  the  entrance  of  people  to  the  calling  of 
teaching. 

It  is  often  argued  that,  because  the  state  has 
encouraged  certain  specific  types  of  compensa- 
tion for  retirement  in  the  case  of  particular 
groups  of  employees,  thereby  a  precedent  has 
been  established  for  a  similar  system  for  teachers. 
This  claim  ignores  the  fact  that  the  state  may 
have  been  mistaken  in  setting  up  a  particular 
system  of  compensation  for  retirement.  All,  in- 
cluding teachers,  are  under  a  certain  obligation 

36 


RETIREMENT  ALLOWANCES 

to  see  to  it  that  any  action  taken  in  the  future  is 
along  lines  that  are  fundamentally  right. 

It  is  also  frequently  urged  that  teaching  is  a 
calling  imposing  greater  hardship  and  liability 
of  earlier  breakdown  than  other  calhngs.  This 
may  be  true  for  certain  classes  of  workers,  but 
anything  like  scientific  evidence  in  its  favor  is 
still  lacking.  Such  callings  as  those  of  the  nurse, 
physician,  and  the  various  trades  sometimes  lead 
to  as  early  incapacity  as  teaching. 

From  the  standpoint  of  general  policy  those 
who  seek  to  promote  teachers'  pensions  will  do 
well  to  treat  the  entire  question  of  teachers'  re- 
tirement allowances  as  a  venture  in  the  field  of 
compulsory  social  insurance,  whose  underlying 
principles  are,  as  has  already  been  intimated, 
that  all  persons  should  be  required  by  law  to  in- 
sure themselves  against  the  various  contingen- 
cies of  life,  and  that  the  employing  authority 
should,  in  all  cases  where  the  annuity  operates  for 
the  benefit  of  his  business,  be  required  to  con- 
tribute in  part  to  the  cost  of  maintaining  it. 

It  is  true  that  the  time  is  not  ripe  to  discuss 
teachers'  retirement  allowances  in  terms  of  a 
comprehensive  scheme  of  compulsory  insurance; 
if  it  were,  then  protection  against  the  risks  of 
sickness,  accident,  disabiUty,  and  death,  as  well  as 

37 


4^  h«*^r-«/>,.o» 


THE  TEACHER  AND  OLD  AGE 

against  old  age  and  incapacity,  must  be  afforded ; 
provision  for  the  early  retirement  of  teachers  for 
disability  must  be  made;  teachers  must  be  re- 
quired to  take  out  insurance  for  the  protection 
of  those  dependent  upon  them  in  case  of  death. 
Inasmuch  as  the  retirement  allowances  for  teach- 
ers on  account  of  incapacity  due  to  old  age  or 
disability  are  being  rapidly  adopted  in  this  coun- 
try, we  can  deal  with  them  in  terms  of  compulsory 
insurance  and  apply  to  them  the  principles  and 
standards  of  such  insurance  which  have  gained 
common  acceptance  only  by  regarding  the  whole 
matter  of  teachers'  retirement  allowances  as 
an  experiment  in  compulsory  insurance.  Will  it 
be  possible  to  approach  the  question  from  the 
triple,  yet  common,  standpoint  of  the  welfare  of 
the  worker,  the  efficiency  of  the  teaching  pro- 
fession, and  the  protection  of  society  against 
poverty  and  dependency  ? 

The  teacher  should  contribute  to  the  support  of 
his  own  retire^nent  allowance 

A  part  of  the  expense  of  the  retirement  allowance 
should  he  home  hy  the  beneficiary.  The  Massachu- 
setts Commission  on  Old- Age  Pensions  (i 910)  de- 
clared this  principle  to  be  fundamental  and  vital. 
The  State  of  Massachusetts  has  appUed  it  in  the 

38 


RETIREMENT  ALLOWANCES 

present  retirement  system  for  its  employees. 
The  same  commission  reported  strongly  against 
the  noncontributory  pension  for  public  employ- 
ees because  of  the  heavy  expense  of  such  a  pol- 
icy, holding  this  objection  to  be  an  especially 
weighty  one  *'in  view  of  the  large  increase  of 
public  expenditures  and  public  indebtedness  in 
Massachusetts  during  recent  years,"  and  because 
such  an  expense  would  be  needless,  since  "public 
employees  can  well  afford  to  pay  at  least  some 
part  of  the  cost  of  a  retirement  system";  and 
holding  further  that  any  noncontributory  pen- 
sion must  exert  a  depressing  effect  on  wages,  a 
demoralizing  reaction  on  character,  and  a  disin- 
tegrating influence  on  the  family. 

The  commission  declared  that  "a  policy  which 
threatened  social  consequences  of  so  sweepingly 
harmful  a  character  is  not  one  that  the  state,  the 
county,  the  city,  or  the  town  as  an  employer  can 
afford  to  sanction,"  and  that  ''the  dubious  pol- 
icy of  noncontributory  pensions  should  not  be 
encouraged  by  the  example  of  the  municipality 
or  of  the  state."  After  pointing  out  that  the 
straight  pensions  supported  by  the  public  in  the 
state  have  usually  been  given  to  those  employed 
in  occupations  involving  an  unusual  degree  of 
danger,  devotion,  and  sacrifice,  the  report  de- 

39 


THE  TEACHER  AND  OLD  AGE 

Clares  that,  "whatever  may  be  done  in  the 
future  toward  the  extension  of  pensions,  provi- 
sions for  all  classes  of  public  employees  should  be 
on  the  contributory  basis." 

Experience  shows  that  the  noncontributory 
pension  for  teachers  is  usually  not  large  enough 
to  afford  an  adequate  protection  against  old  age 
and  incapacity.  The  tendency  in  those  state  sys- 
tems which  have  given  pensions,  hke  those  of 
Maryland  and  Rhode  Island,  is  to  reduce  the 
heavy  expense  of  public  maintenance  by  grant- 
ing an  allowance  too  small  to  afford  even  a  mini- 
mum of  comfort  to  the  beneficiary.  On  the  other 
hand,  in  those  states  like  New  Jersey  and  New 
York,  where  the  teachers  pay  dues  toward  the 
support  of  their  own  protection,  the  annuity  is 
sufficient  to  insure  them  against  want  and  de- 
pendency. 

The  contributory  principle  is  best  for  the  wel- 
fare of  the  teacher,  because  it  guarantees  inde- 
pendence in  old  age  and  makes  it  possible  for 
him  to  protect  adequately  those  dependent  upon 
him.  It  should  be  appHed  by  the  state  as  the  em- 
ployer seeking  to  better  the  service,  since  retire- 
ment allowances  will  accompHsh  good  results  in 
the  improvement  of  the  service  in  proportion  as 
they  afford  an  adequate  protection  against  the 
40 


RETIREMENT  ALLOWANCES 

failing  years  of  life.  When  the  state  takes  hold 
of  the  retirement  system,  it  should  require  the 
worker  to  pay  toward  the  support  of  his  annuity, 
not  only  to  encourage  thrift  and  promote  saving, 
but  also  to  make  it  certain  that  in  his  last  days 
he  may  not  become  a  burden  on  society. 

That  part  of  the  annuity  which  comes  from 
the  dues  paid  by  the  teacher  adds,  of  course,  noth- 
ing to  his  total  wage  directly.  The  withdrawal 
equity  should  always  be  recognized  whereby  the 
teacher,  upon  withdrawal  before  legal  retirement, 
has  returned  to  him  his  own  contributions,  to- 
gether with  reasonable  interest.  Then  state 
compulsion  and  management  of  his  contributions 
toward  his  own  annuity  does  benefit  him  during 
his  working  period,  by  forcing  him  to  make  pro- 
vision for  the  future,  by  developing  a  spirit  and 
habit  of  thrift,  by  securing  for  him  high-class  in- 
surance at  the  lowest  possible  cost,  by  guaran- 
teeing the  solvency  of  the  insurance  scheme,  and 
by  developing  a  security  of  tenure  of  position 
that  grows  measurably  with  the  increase  of  his 
equity  in  the  insurance  attached  to  the  business. 
The  operation  of  compulsory  insurance  under 
these  conditions  is  such  as  to  preserve  in  the  high- 
est measure  the  self-respect  of  the  worker,  and 
to  better,  rather  than  impair,  the  prestige  and 

41 


THE  TEACHER  AND  OLD  AGE 

standing  in  public  opinion  of  the  profession  or 
calling  he  follows. 

Aside  from  moral  and  social  considerations,  it 
makes  little  if  any  difference  in  the  long  run 
whether  the  public  or  the  teacher  pays  the  cost 
of  the  retirement  allowance,  or  in  what  proportion 
each  contributes.  This  is  particularly  true  in  the 
case  of  those  hereafter  entering  the  profession. 
In  setting  the  wage  and  bargaining  with  a  new 
employee,  the  school  authorities  will,  either 
directly  or  unconsciously,  take  into  considera- 
tion the  cost  of  the  public  contribution  to  the 
retirement  allowance  as  a  real  though  somewhat 
vaguely  defined  part  of  his  total  wage.  In  this 
way  the  concession  of  public  support  would  be- 
come a  factor  in  each  new  wage  adjustment  as 
certainly  and  as  potently  as  any  other  portion  of 
his  wage  compensation. 

On  the  other  hand,  the  new  teacher  facing 
employment  soon  comes  to  look  upon  his  total 
actual  salary  as  made  up  of  a  current  salary 
received  from  month  to  month,  a  deferred  sal- 
ary composed  of  amounts  withheld  from  his  own 
earnings  and  invested  as  savings  for  him,  and 
deferred  payments  for  service  in  the  form  of 
public  contributions  toward  a  retirement  allow- 
ance, to  be  received  at  some  time  in  the  future, 
42 


RETIREMENT  ALLOWANCES 

for  continuous,  faithful  service.  The  immediate 
placing  in  operation  of  a  retirement  system 
operates  to  diminish  the  salary  of  the  bene- 
ficiary, but  in  the  long  run  this  is  not  the  case. 
After  a  system  of  this  sort  has  been  in  operation 
for  some  time,  the  deduction  from  the  employee's 
salary  would  so  operate  as  to  be  largely  a  nominal 
affair. 

Withdrawal  equity  and  annuity 

The  withdrawal  equity  of  the  teacher  in  his  own 
payments  toward  his  annuity  should  be  recog- 
nized. When  he  retires  from  the  profession  for 
any  reason,  dues  withheld  from  his  wage  should 
be  regarded  as  deferred  payments  invested  by 
the  state  for  his  benefit.  He  is  as  justly  entitled 
to  the  present  worth  of  such  a  saving  as  if  it  had 
been  deposited  by  him  and  invested  by  a  sav- 
ings bank;  otherwise  the  state  cannot  defend  a 
program  of  compulsory  insurance  as  a  means  of 
promoting  thrift,  encouraging  saving,  and  safe- 
guarding old  age.  Young  teachers  who  may  not 
and  usually  do  not  remain  in  the  profession  ought 
not  to  be  mulcted  or  penalized,  even  to  the  ex- 
tent of  the  smallest  part  of  their  savings,  for  the 
benefit  of  those  who  do.  The  recognition  of  this 
equity  will  operate  to  preserve  that  mobility  of  the 

43 


THE  TEACHER  AND  OLD  AGE 

teaching  profession  that  has  proved  so  desirable 
on  the  whole  to  the  American  schools,  since 
teachers  shifting  from  one  position  or  state  to 
another  would  not  be  deterred  by  the  prospect  of 
the  complete  loss  of  their  payments. 

Annuities  only  should  be  used  in  making  pay- 
ments for  any  cause  to  the  beneficiaries  of  the 
retirement  system.  As  a  venture  in  social  insur- 
ance the  scheme  must  have  due  regard  for  the 
protection  of  the  beneficiary  against  old  age  and 
dependency.  Payments  of  the  total  amount,  in 
the  form  of  a  lump  sum  representing  the  present 
worth  of  the  claims  of  the  beneficiary,  are  highly 
objectionable,  because  there  is  danger,  and  in 
many  cases  every  probability,  that  the  money 
will  be  lost  either  through  unwise  investments  or 
unwise  expenditures  of  one  kind  or  another.  How- 
ever able  some  may  be  to  take  care  of  their  own 
money,  the  state  must  protect  against  losing  their 
savings  those  who  are  less  capable  of  making  in- 
vestments. The  principle  of  annual  distributions, 
paid,  say,  in  monthly  or  quarterly  installments, 
should  be  applied  both  to  the  accumulated  sav- 
ings of  the  teacher  and  to  the  pension  added 
by  the  public.  When  a  teacher  has  served  long 
enough  to  become  a  risk  on  the  funds,  payments 
after  withdrawal  for  any  cause  should  be  in  terms 

44 


RETIREMENT  ALLOWANCES 

of  annual  amounts  certain  to  continue  at  least 
until  the  death  of  the  beneficiary. 

The  Retirement  System  for  Massachusetts  State 

Employees  is  sound  in  principle 
Most  of  the  general  features  of  the  state  re- 
tirement system  of  Massachusetts  for  its  own 
employees  represent  the  best  ideas  in  compul- 
sory social  insurance  of  to-day,  and  might  well 
serve  as  a  model  in  principle  in  any  proposed 
plan  of  annuities  for  teachers.  The  present  state 
scheme  is  comprehensive,  being  open  to  all  those 
in  the  service  of  the  commonwealth,  and  is  obli- 
gatory upon  those  hereafter  entering  its  work. 
The  civil  service  laws,  as  has  already  been  pointed 
out,  set  up  what  amounts  to  a  plan  of  certifica- 
tion which  prevents  the  employment  of  the  in- 
competent and  insures  what  is  practically  per- 
manent tenure  of  position  during  good  behavior. 
Upon  withdrawal  from  the  fund  for  any  reason, 
all  the  accumulated  savings  with  interest  com- 
pounded at  three  per  cent  are  returned  to  the 
beneficiary  or  to  his  legal  representative,  either 

in  a  lump  sum  or  in  the  form  of  an  annuity,  the 
state  in  no  case  withholding  or  seeking  to  profit 
by  the  contributions  of  the  membership. 

The  contributory  principle  is  carried  out  by 

45 


THE  TEACHER  AND  OLD  AGE 

making  the  members,  through  dues,  save  for  the 
support  of  their  own  annuities  and  by  guarantee- 
ing that  the  state  will  give  up  a  full  withdrawal 
equity,  for  disability,  or  at  the  close  of  the  full  pe- 
riod of  service,  a  pension  equal  in  amount  to  the 
annuity.  Savings  are  required  in  proportion  to 
income,  the  dues  or  assessments  being  graduated 
on  the  basis  of  the  salary  earned.  Thrift  and 
capacity  to  save  are  rewarded,  and  differences  in 
previously  acquired  standards  of  living  are  rec- 
ognized by  making  the  retirement  allowance  de- 
pendent upon  the  contributions  and  therefore 
really  graduated  by  the  customary  earnings  of 
the  beneficiary. 

As  a  venture  in  social  insurance,  an  attempt 
is  made  to  insure  a  decent  competence  for  old 
age  by  making  two  hundred  dollars  the  smallest 
allowance  given  at  retirement,  the  minimum 
contribution  from  the  salaries  of  members  being 
set  at  a  sum  sufficient  to  yield  during  the  work- 
ing period  of  the  beneficiary  an  annuity  which, 
together  with  an  equal  pension  by  the  state, 
will  amount  to  that  sum.  Since  the  retirement 
system  is  not  interested  in  rewarding  savings 
beyond  the  reasonable  limits  necessary  in  order 
to  promote  thrift,  to  make  membership  attrac- 
tive, and  to  safeguard  the  closing  years  of  life 

46 


RETIREMENT  ALLOWANCES 

against  penury  and  dependency,  the  annuity  of 
the  beneficiary,  whatever  his  salary  may  be,  can 
never  be  larger  than  that  earned  by  the  accumu- 
lated savings  of  more  than  seventy-eight  dollars 
per  year,  which  is  the  maximum  dues  required  or 
permitted. 

The  risks  to  be  covered  in  a  plan  of  retirement 
allowances  for  teachers  probably  should  not  be 
more  than  those  undertaken  in  the  system  for 
the  employees  of  the  state  in  Massachusetts, 
which  are,  generally  speaking,  old  age,  incapacity 
resulting  from  old  age,  and  disability  due  to  any 
cause  after  ten  years  of  service.  There  is,  in  addi- 
tion to  these,  an  insurance,  in  a  sense,  against  the 
death  of  the  member,  which  is  provided  in  two 
ways.  When  his  demise  takes  place  while  still  in 
the  service,  the  accumulated  savings  due  him  are 
paid  in  a  lump  sum  to  his  estate.  At  full  retire- 
ment, the  beneficiary  can  elect  either  to  receive 
an  allowance  for  the  number  of  years  during 
which  he  lives,  or  an  annual  amount  for  a  fixed 
and  certain  number  of  years,  which  upon  the 
death  of  the  beneficiary  would  be  paid  to  his 
legal  representatives  for  the  unexpired  time. 

It  seems  clear  that,  in  case  the  latter  plan  is 
chosen  by  the  retiring  member,  the  annual  allow- 
ance would  be  less  than  in  the  former.  It  will,  of 

47 


THE  TEACHER  AND  OLD  AGE 

course,  be  necessary  to  publish  for  the  informa- 
tion of  members  the  exact  amounts  and  differ- 
ences between  these  two  schemes  through  care- 
fully prepared  actuarial  tables.  Through  their 
representatives  on  the  State  Retirement  Fund 
Board  both  the  state  and  the  members  have  a 
voice  in  the  administration  of  the  plan,  and  the 
management  of  the  venture  is  under  the  close 
inspection  and  supervision  of  the  State  Insur- 
ance Commissioner. 

These  forms  of  protection  seem  to  go  as  far  as 
any  scheme  of  compulsory  insurance  should  at 
the  present  time.  It  is  doubtful  whether  it  would 
ever  be  possible  or  wise  to  include  much  more  in 
any  one  system  and  fund.  Even  in  Germany, 
where  wage-workers  are  required  to  protect 
themselves  against  sickness,  accident,  disabihty 
due  to  accident  at  any  time  from  the  outset  in 
any  employment,  and  even  against  unemploy- 
ment, the  state  schemes  have  usually  undertaken 
no  more  than  insurance  against  old  age  and  in- 
capacity, and  under  certain  conditions,  death, 
using  other  schemes  and  plans,  usually  of  a  pri- 
vate or  semi-pubHc  character,  to  secure  the  com- 
pulsory insurance  of  its  citizens  against  the  other 
risks  of  life. 


48 


RETIREMENT  ALLOWANCES 

Membership,  Certification,  and  Tenure 

Membership  to  be  comprehensive.  In  the  retire- 
ment system  adopted,  all  persons  should  be  in- 
cluded who  are  regularly  employed,  either  as 
teachers  or  otherwise,  in  all  of  the  schools  of  the 
state  supported  and  controlled  by  the  public. 
Every  argument  for  a  retirement  allowance  for 
teachers  supports  equally  well  the  proposal  that 
all  others  regularly  employed  in  any  capacity  by 
the  schools,  such  as  clerks,  bookkeepers,  steno- 
graphers, engineers,  and  janitors,  should  be  ad- 
mitted to  membership  in  the  same  scheme.  An- 
nuities for  their  benefit  will  be  just  as  effective 
in  raising  the  self-respect  of  the  worker,  pro- 
moting thrift,  requiring  saving,  and  safeguarding 
against  the  risks  of  old  age  and  disability,  as 
those  for  instructors  in  the  schoolroom. 

Retirement  allowances  for  employees  other 
than  teachers  will  be  equally  wise  as  a  business 
proposition  from  the  standpoint  of  the  public, 
since  there  is  no  reason  why  they  should  not  re- 
sult in  the  betterment  of  the  service  by  attract- 
ing, holding,  and  retiring  at  the  proper  age,  desir- 
able men  and  women  serving  in  positions  where 
good  work  is  just  as  necessary  to  the  efficiency  of 
the  school  system  as  in  the  actual  teaching  pro- 

49 


THE  TEACHER  AND  OLD  AGE 

cess.  It  is  equally  necessary  that  the  state  should 
require  the  clerk  and  the  engineer  of  the  school 
building,  as  well  as  the  teacher,  to  safeguard 
themselves  against  old  age  and  dependency.  As 
a  venture  in  social  insurance  it  would  be  both 
an  unjust  discrimination  and  confusing  to  pro- 
tect teachers  with  retirement  allowances  and 
neglect  all  others  engaged  in  the  same  business. 

Certification  of  all  new  teachers  by  the  state  edu- 
cational authorities  is  necessary  if  the  public  is 
to  secure  the  best  results  from  the  money  which 
it  gives  for  the  support  of  a  system  of  retirement 
allowances  for  them.  Pensions  or  annuities  of 
any  kind  are  certain  to  prove  even  more  attrac- 
tive to  the  incompetent  than  to  the  competent 
instructor.  Any  betterment  in  the  economic  con- 
dition of  workmen  always  brings  a  rush  of  the 
unfit,  as  well  as  the  fit,  to  the  work.  Usually  in 
the  competition  between  them  the  wage  falls  to 
the  old  level  and  the  good  workmen  are  driven 
from  the  field.  In  any  work  or  business  where 
competition  in  the  output  of  the  worker  is  ab- 
sent, standards  and  measures  of  efficiency  are  ill- 
defined  and  administration  is  popular  instead  of 
expert  and  professional,  as  is  sometimes,  at  least, 
the  case  with  our  schools;  the  inefficient  but  pre- 
tentious and  self-seeking  worker  is  very  likely  to 

SO 


RETIREMENT  ALLOWANCES 

be  chosen  and  remain  permanently  in  the  serv- 
ice to  which  he  has  been  drawn  by  the  conces- 
sion of  a  retirement  allowance,  thus  defeating  its 
large  purpose  of  bettering  the  profession. 

All  successful  attempts  to  improve  the  effi- 
ciency of  the  schools  by  bettering  the  economic 
condition  of  the  teacher  should  go  hand  in  hand 
with  direct  selecting  agencies,  cutting  off  the  rush 
of  the  incompetent  to  the  field.  It  is  equally  true 
that  to  raise  the  qualifications  workers  must 
have  before  entering  any  occupation  will  avail 
but  Httle  unless  at  the  same  time  the  work  is 
made,  through  increasing  the  wage  or  some  other 
concession  like  that  of  a  retirement  allowance, 
sufficiently  attractive  to  draw  to  it  those  who  are 
able  to  meet  its  entrance  requirements.  Teach- 
ers' annuities  and  retirement  allowances  in  any 
state  where  the  absence  of  proper  selecting  agen- 
cies operates  to  fill  the  schools  with  poor  teachers 
are  worse  than  useless,  since  their  only  effect 
would  be  to  perpetuate  the  reign  of  the  unfit. 

Legislation  in  behalf  of  teachers'  annuities  of 
any  kind  should  go  hand  in  hand  with  move- 
ments raising  the  standards  of  proficiency  in  the 
profession  and  eliminating  the  unfit.  Among  the 
direct  selecting  agencies  that  might  be  used  to 
accomplish  this  purpose  are  medical  examina- 

51 


THE  TEACHER   AND  OLD  AGE 

tion  of  teachers,  more  effective  supervision,  more 
effective  adtninistrative  selection  of  teachers, 
and  higher  standards  of  certification.  The  time 
is  not  ripe  for  a  medical  examination  as  a  condi- 
tion of  entrance  to  school  work,  although  doubt- 
less some  day  it  will  be  required.  Supervision 
and  administration  will  better  the  teaching  serv- 
ice in  the  state  in  proportion  as  they  are  im- 
proved by  the  efforts  of  local  authorities  every- 
where. 

The  absence  of  adequate  state  systems  of 
certification  for  teachers  has  thrown  the  respon- 
sibility upon  the  community  for  passing  upon 
the  qualifications  of  its  teachers.  There  is  no 
fixed  or  general  standard  of  experience,  prepara- 
tion, or  schoolroom  success  recognized  for  the 
different  kinds  of  teaching  positions.  Through- 
out the  country  the  whole  matter  is  in  a  chaotic 
condition.  Communities  having  a  high  degree  of 
civic  spirit  and  responsibility  secure  good  teach- 
ers. Communities  lacking  these  qualities  are 
satisfied  to  secure  and  retain  poor  teachers. 

While  the  complaint  is  frequently  made,  un- 
doubtedly with  more  or  less  truth,  that  there  are 
not  enough  good  teachers  to  go  around,  the  fact 
remains  that  communities  willing  to  pay  for  good 
teachers  invariably  secure  them.  Obviously  one 
52 


RETIREMENT  ALLOWANCES 

way  to  get  good  teachers  is  to  make  it  impossi- 
ble for  poor  ones  to  obtain  positions.  A  state  re- 
tirement system  should  raise  the  general  level  of 
teaching  efficiency  throughout  a  state,  and  expe- 
rience has  demonstrated  that  before  teachers  are 
intrenched  in  their  positions  by  a  pension  system 
and  tenure  law,  the  quality  of  service  should  be 
safeguarded  by  an  adequate  certification  plan. 
The  great  strength  of  the  retirement  system  for 
state  employees  in  Massachusetts  lies  in  the  fact 
that  it  combines  with  the  retirement  allowance  an 
entrance  examination  to  a  position  which  elimi- 
nates the  incompetent  and  sets  up  a  civil  ser\dce 
that  insures  a  permanent  tenure  of  position. 

Legislation  providing  teachers'  annuities  should 
be  supplemented  by  a  law  authorizing  a  system 
of  certification  for  all  the  teachers  protected  by 
the  retirement  system,  and  the  measure  should 
be  drawn  in  such  terms  as  to  leave  the  state  edu- 
cational authorities  free,  not  only  to  change  their 
standards  through  the  years  to  meet  the  chang- 
ing conditions,  but  to  adapt  their  standards  of 
requirements  from  time  to  time  to  the  different 
kinds  and  character  of  teaching  positions  to  be 
filled. 

Some  form  of  legal  tenure  of  position  for  every 
teacher  must  be  guaranteed  in  some  way  in  order 

S3 


THE  TEACHER  AND  OLD  AGE 

to  secure  the  full  benefit  of  a  retirement  system. 
What  form  such  a  tenure  law  should  take  is  still 
a  debatable  issue.  New  Jersey  is  the  only  state 
having  a  tenure-of-office  law  guaranteeing  per- 
manence of  position  during  good  behavior  and 
efficiency.  In  his  report  on  the  East  Orange 
schools,  Professor  E.  C.  Moore  comments  on  the 
workings  of  the  New  Jersey  tenure-of-office  law 
as  follows:  *' There  is  one  other  feature  which 
does  not  yet,  but  will  in  time,  tend  to  lower  the 
efficiency  of  the  schools.  I  refer  to  the  state  ten- 
ure-of-office law.  Security  in  office  during  good 
and  efiicient  service  is  something  which  all  in- 
terested in  the  public  schools  pray  earnestly  for, 
but  lodgment  in  office  for  life  is  quite  another 
matter.  It  is  practically  impossible  to  prove  pro- 
fessional incompetency  in  court;  and  places 
where  teachers  can  appeal  to  the  courts  for  final 
review  of  adverse  action  against  them  by  boards 
of  education,  and  are  practically  never  dismissed, 
have  poor  schools.  Such  tenure  of  office  is  good 
for  the  clerk,  but  bad  for  the  work.  They  should, 
of  course,  have  the  right  to  demand  a  public 
hearing,  but  it  should  be  conducted  by  the 
board  of  education,  not  by  a  court.  The  best 
kind  of  tenure  of  office  is  that  which  an  enlight- 
ened public  demands  and  insists  upon  for  its 

54 


RETIREMENT  ALLOWANCES 

teachers.  Both  teachers  and  people  are  unfor- 
tunate in  having  any  other  kind." 

On  the  other  hand,  there  can  be  no  doubt  that 
there  are  many  places  where  the  tenure  of  posi- 
tion of  the  teacher  is  uncertain  and  dependent 
upon  the  fortunes  of  politics,  or  the  caprice  or 
prejudice  of  one  kind  or  another  of  school  au- 
thorities and  of  the  public.  In  such  places,  it  is 
useless  to  expect  annuities  to  work  for  the  better- 
ment of  the  service  and  the  welfare  of  the  pro- 
fession. The  conclusion  is  that  some  form  of  ten- 
ure must  be  provided  that  will  safeguard  the 
interests  of  both  the  pupils  and  the  teachers.  It 
seems  probable  that  a  public  conscience,  awake 
to  the  necessities  of  a  retirement  system  for 
teachers,  would  develop  a  public  sentiment  that 
would  support  the  principle  of  tenure  during  efl5- 
ciency  and  good  behavior,  and  then  find  a  way 
to  guarantee  the  efficiency.  The  highest  success 
of  a  retirement  system  requires  standards  of  cer- 
tification, approval  of  work  performed,  and  cer- 
tainty of  continued  employment. 

State  and  not  local  support  should  he  given 

State  and  not  local  support  should  be  given  the 
retirement  allowance.  It  seems  to  be  admitted 
without  debate  that  public  support  and  manage- 

55  . 


THE  TEACHER  AND  OLD  AGE 

ment  of  teachers'  annuity  ventures  are  necessary 
to  their  success.  The  debatable  question,  if  any, 
is  whether  the  pubHc  should  deal  with  the  retire- 
ment problem  through  the  state  or  through  the 
cities  and  towns  operating  the  schools  in  which 
the  beneficiaries  are  employed.  For  the  state  to 
carry  on  a  system  of  annuities  for  the  benefit  of 
those  who  are  not  directly  employed  by  it,  but  by 
local  communities,  is  a  departure  from  the  trend 
of  the  steps  already  taken  by  some  of  the  states, 
in  deahng  with  teachers'  pensions  and  annuities. 
Fifteen  states  permit  towns  and  cities  to  pension 
teachers.  Why  should  these  states  and  the  states 
having  no  laws  for  teachers'  pensions  be  urged 
to  maintain  a  state  system  of  annuities  for  the 
teachers  employed  by  local  communities,  and  how 
shall  the  proposal  be  justified  ? 

While  it  is  probably  possible  to  grant  allow- 
ances to  teachers  out  of  the  treasury  of  a  large 
city  in  such  a  way  as  to  serve  the  best  interests 
of  its  schools,  municipal  systems  of  pensions  or 
annuities  have  never  succeeded  in  meeting  a 
state-wide  need.  In  Massachusetts,  for  example, 
the  present  law  permitting  towns  and  cities  to 
pension  their  teachers  has  not  been  a  successful 
solution  of  the  problem.  Though  the  act  has 
been  in  force  about  five  years,  only  eleven  out 
56 


RETIREMENT  ALLOWANCES 

of  three  hundred  and  fifty-four  cities  and  towns 
have  accepted  its  provisions.  There  is  no  indica- 
tion that  any  considerable  portion  of  the  teach- 
ers of  the  state  would  ever  receive  the  benefit  of 
the  statute. 

Where  allowances  have  been  made  under  mu- 
nicipal systems,  they  have  usually  been  so  small 
as  to  afford  an  inadequate  competence  for  old 
age,  thus  defeating  in  large  measure  all  the  pur- 
poses of  the  legislation.  The  main  intent  usually 
is  to  give  school  committees  a  more  satisfactory 
way  out  in  retiring  old  teachers.  It  is  possible 
that  the  moral  and  social  effect  of  the  gratui- 
ties or  concessions  granted  may  not  be  for  the 
final  welfare  of  the  individual  or  the  permanent 
good  of  the  profession.  Such  schemes  are  not 
based  on  sound  principles  of  social  insurance,  and 
at  best  can  only  be  regarded  as  a  temporary  ex- 
pedient and  a  forerunner  of  a  more  comprehen- 
sive plan. 

Even  if  a  city  here  and  there  should  grant 
an  adequate  pension  to  the  superannuated  in- 
structor, the  educational  benefit  to  the  state  as  a 
whole  would  be  small  if  not  questionable,  since 
the  result  would  probably  be  simply  to  enable 
the  schools  concerned  to  attract  and  to  hold  a 
few  desirable  teachers,  as  against  other  cities 

57 


THE  TEACHER  AND  OLD  AGE 

and  towns.  Were  every  community  required  to 
grant  retirement  allowances,  supported  entirely 
out  of  the  local  treasury,  to  those  who  have  by 
long  years  of  faithful  service  acquired  some  claim 
to  its  bounty,  teachers  would  practically  be 
obliged  to  spend  their  lives  in  one  school  system 
in  order  to  profit  by  the  gratuity,  thus  destroying 
the  mobility  of  the  teaching  profession,  which 
has  been  one  of  the  largest,  if  not  the  largest 
source  of  initiative  and  growth.  It  is  equally 
true  that  under  present  conditions,  owing  to  the 
mobility  of  teachers,  their  insecurity  of  tenure, 
and  other  circumstances  that  need  not  be  dis- 
cussed here,  a  retirement  system  maintained  out 
of  public  funds,  in  whole  or  in  p>art  contributed 
by  the  locality,  can  be  effective  only  in  the  larger 
cities. 

With  the  recognition  of  the  soundness  of  the 
principles  of  contribution  and  withdrawal  equi- 
ties as  features  of  retirement  allowance  systems, 
local  pension  systems  for  all  the  cities  and  towns 
of  the  state  become  at  once  impracticable,  and 
a  state  system  becomes  necessary  as  the  only 
proper  way  to  deal  with  the  question.  With  joint 
support  on  the  part  of  the  teacher  and  the  com- 
munity, every  town  and  city  in  a  state  would  be 
required  to  carry  on  a  savings-bank  account  with 
58 


RETIREMENT  ALLOWANCES 

each  member  of  the  teaching  force,  to  invest  his 
earnings  profitably  and  yet  safely,  and  to  guaran- 
tee his  accumulated  savings ;  a  service  which  it  is 
certain  that,  generally  speaking,  only  the  state, 
dealing  with  the  problem  on  a  larger  scale  and 
equipped  with  the  larger  resources  for  invest- 
ment furnished  by  a  state- wide  teaching  force 
and,  possibly,  by  legislative  appropriations, 
would  be  able  to  render  to  the  best  advantage. 

There  is  a  large  measure  of  truth  in  the  claim 
that  although  teachers  may  be  paid  their  salaries 
out  of  local  funds,  yet  both  in  law  and  in  fact 
they  are,  in  more  senses  than  one,  state  employ- 
ees. There  is  no  other  local  enterprise  which  the 
state  has  attempted  to  regulate  by  legislation 
so  much  as  the  public  schools.  From  whatever 
source  they  are  paid,  the  state  looks  to  teach- 
ers as  their  agents  to  fit  the  children  of  every 
city,  hamlet,  and  remote  country  place  for  useful 
and  intelUgent  citizenship.  The  mobility  of  the 
teaching  profession  shifting  from  one  position  to 
another,  the  interchange  of  pupils  between  local- 
ities, the  interest  of  every  community  in  the  re- 
sults of  the  education  given  in  every  other  place 
as  well  as  by  its  own  schools,  make  the  ques- 
tion of  the  efi&ciency  of  the  teacher  a  matter  of 
state-wide  concern,  and  justify  the  state  in  doing 

59 


THE  TEACHER  AND  OLD  AGE 

anything  necessary  for  the  betterment  of  the  pro- 
fession which  cities  and  towns  are  unable  to  do 
properly. 

Recognizing  the  semi-state  character  of  the 
service  of  the  teacher,  all  the  Western  Common- 
wealths have  from  the  first  used  the  income  from 
the  large  permanent  common-school  funds  which 
they  are  so  fortunate  as  to  possess,  to  pay  a  large 
part  of  the  salaries  of  the  men  and  women  serv- 
ing in  local  public  schools.  It  seems  clear  that  all 
over  the  country  it  will  be  necessary  for  the  state 
in  the  future,  with  its  large  resources  as  a  wider 
taxing  unit,  to  give  larger  financial  aid  to  the 
cause  of  education;  adjusting  inequalities  in  local 
burdens;  aiding  struggling  communities;  stimu- 
lating new  forms  of  education  like  industrial 
training,  household  arts,  and  agricultural  train- 
ing; doing  the  things  which  the  local  community 
is  unable  to  do;  doing  things  for  the  betterment 
of  the  teaching  profession  and  the  work  of  the 
schools,  like  the  certification  and  retirement  of 
teachers:  all  of  which  require  a  larger  outlook, 
collective  action,  and  also  central  administration 
of  a  kind  which  only  the  state  and  not  the  local 
community  can  bring  to  bear. 


60 


RETIREMENT  ALLOWANCES 

Cost  of  the  proposed  plan 

The  cost  of  any  proposed  plan  for  retirement 
allowances,  in  view  of  the  far-reaching  financial 
responsibilities  involved,  should  be  known  within 
reasonable  limits  before  it  is  adopted.  Teachers 
who  are  required  to  become  members  upon  en- 
tering the  profession  should  know  definitely  both 
the  amount  of  the  dues  which  they  are  required 
to  pay,  and  the  return  which  they  are  to  receive 
from  the  investment  made  and  from  the  pension 
contributed  by  the  state.  This  is  more  necessary 
in  a  scheme  for  the  employees  of  the  public  schools 
than  in  the  case  of  the  present  retirement  sys- 
tem for  state  employees.  The  membership  will, 
finally  at  least,  be  larger,  more  widely  scattered, 
and  in  the  employ  of  cities  and  towns  rather  than 
that  of  the  state  operating  the  venture. 

In  order  that  the  prospective  members  of  the 
retirement  allowance  scheme  may  have  this  in- 
formation, tables  should  be  prepared  showing  by 
years  the  cost  to  the  members  according  to  their 
salaries,  the  present  worth  of  accumulated  sav- 
ings, the  amount  of  the  annuity  and]  the  amount 
of  an  equal  pension  to  which  the  beneficiary  is 
entitled  upon  withdrawal  for  disability  or  at  the 
close  of  the  full  period  of  service  required.  The 
6i 


THE  TEACHER  AND  OLD  AGE 

effect  of  this  will  be  to  put  teachers  in  possession 
of  as  much,  if  not  more,  information  before  en- 
tering this  compulsory  insurance  venture  than 
they  would  have  in  taking  out  a  poHcy  with  any 
standard  insurance  company. 

The  state  should  bear  the  cost  of  the  adminis- 
tration of  the  venture.  A  state  retirement  fund 
board,  to  serve  without  pay,  ought  to  have  an 
executive  secretary  to  carry  out  its  ruHngs.  A 
man  competent  to  do  this  work  properly  should 
certainly  receive  a  salary  of  not  less  than  thirty- 
five  hundred  dollars  per  year.  In  addition,  there 
would  probably  be  ofl&ce  rent,  certainly  office 
expenses,  and  the  cost  of  clerical  and  actuarial 
service. 

An  important  and  difficult  question  is  the  prob- 
able cost  to  the  state  of  any  retirement  system 
it  may  undertake.  The  state  is  entitled  to  know 
this  roughly,  at  least,  before  any  law  is  enacted. 
Obviously  only  an  approximation  can  be  given. 
The  number  of  teachers  in  different  age  groups 
can  be  ascertained,  but  it  cannot  be  predicted  in 
the  present  state  of  our  statistical  knowledge 
how  many  of  them  will  remain  in  the  work  of 
teaching  long  enough  to  become  pensionable. 
We  can  say  there  are  so  many  teachers  in  the 
state  between  seventy  and  sixty  years  of  age,  so 
62 


RETIREMENT  ALLOWANCES 

many  between  sixty  years  and  fifty,  and  so  on; 
if  the  ratio  continues  as  it  has  in  the  past,  the 
cost  in  any  given  period  will  be  a  certain  maxi- 
mum sum  that  can  be  roughly  worked  out.  The 
cost  for  a  period  twenty  or  thirty  years  hence 
cannot  be  so  well  predicted.  Nobody  can  fore- 
tell the  economic  development  of  any  state,  how 
many  children  then  will  be  in  school,  or  the  num- 
ber of  teachers  required  to  teach  them. 

It  is  certain,  however,  that  if  past  experience 
is  duplicated  by  future  developments,  the  initial 
cost  will  be  the  smallest,  and  will  gradually  in- 
crease, reaching  a  maximum  at  the  time  those 
teachers  compelled  to  enter  the  retirement  sys- 
tem reach  the  age  of  retirement,  from  thirty  to 
forty  years  after  the  date  of  the  inauguration  of 
the  system.  The  Report  of  the  Massachusetts 
Board  of  Education  on  Teachers'  Retirement 
Allowances  (1913)  suggests  a  fairly  satisfactory 
method  of  approaching  this  problem. 

It  is  difficult  to  estimate  the  amount  of  the 
cost  at  that  time.  We  do  not  know  what  the 
population  of  any  state  will  be,  or  the  number  of 
school  children,  or  the  number  of  teachers.  It  is 
impossible  to  predict  the  industrial  and  economic 
conditions  upon  which  the  matter  of  teachers 
remaining  or  not  in  the  service  may  so  largely 
63 


THE  TEACHER  AND  OLD  AGE 

depend.  It  is  impossible  to  forecast  the  effect  of 
the  retirement  system  in  holding  teachers  in  the 
work. 

It  must  be  remembered,  as  has  already  been 
pointed  out,  that  there  is  every  probability  that 
the  contribution  by  the  public  to  the  support  of 
the  teachers'  retirement  allowance  is,  after  all, 
only  a  deferred  payment  and,  therefore,  a  part  of 
the  teacher's  total  wage.  Many  believe,  as  has 
also  been  shown,  that  this  concession  on  the  part 
of  the  public  plays  a  part  in  each  new  wage  read- 
justment with  the  teacher,  and  in  this  way  be- 
comes an  actual  though  deferred  part  of  the  com- 
pensation. To  the  extent  to  which  this  is  true 
the  cost  of  teachers'  retirement  ventures  is  in  the 
long  run  no  real  burden  upon  the  public.  The 
effect  would  be  simply  to  shift  the  expense  of  a 
part  of  the  teacher's  salary  from  the  local  to  the 
state  treasury. 

For  reasons  that  have  already  been  discussed, 
if  the  contributions  of  the  public  represent,  as  de- 
ferred payments,  an  increase  in  wage,  then  the 
state  has  simply  come  to  the  aid  of  the  commu- 
nity by  adding  to  the  wage  paid  out  of  the  local 
treasury  an  extra  bonus  or  gratuity  justifiable 
as  being  necessary  for  the  good  of  the  teaching 
profession,  and  as  a  good  business  proposition, 
64 


RETIREMENT  ALLOWANCES 

because  it  will  probably  yield  better  returns  in 
making  the  teacher's  position  attractive  than  the 
same  amount  of  money  spent  in  any  other  way 
for  the  same  purpose.  To  this  must  be  added  the 
social  returns  to  the  state  through  the  encourage- 
ment of  thrift,  the  enforcement  of  saving,  and 
the  protection  of  a  group  of  workers  against 
the  two  great  risks  of  life,  old  age  and  incapac- 
ity, that  have  always  been  such  a  large  social 
burden. 

Conclusion  as  regards  teachers  hereafter  entering 
the  service 

A.  Retirement  allowances  for  teachers  are  a 
wise  investment  of  pubHc  funds,  because 
they  make  possible  improvement  in  the 
service  not  generally  obtainable  without 
them  by  — 

1.  Opening  the  way  to  retiring  incapaci- 
tated teachers  without  hardship. 

2.  Making  it  possible  to  — 

(a)  Attract  better  talent  into  the  serv- 
ice. 

(&)  Hold  the  best  that  enter  the  serv- 
ice. 

(c)  Encourage  those  in  the  service  to 
more  efficient  work. 

65 


THE  TEACHER  AND  OLD  AGE 

B.  Retirement  allowances  for  teachers  admin- 
istered as  social  insurance  are  a  wise  invest- 
ment of  public  funds  because  — 

(a)  They  tend  to  promote  thrift. 

(b)  They  tend  to  make  employment  more 
stable. 

(c)  They  free  the  state  from  the  possibility 
of  supporting  a  number  of  indigent, 
superannuated  people. 

C.  A  retirement  allowance  for  teachers  yet  to 
enter  the  service  should  carry  with  it  cer- 
tain obligations  on  the  prospective  bene- 
ficiaries. Among  these  are  compulsory  par- 
ticipation, compulsory  withdrawal  age, 
acceptance  of  the  principle  of  certification, 
and  some  form  of  legal  tenure  of  position. 
The  obligations  on  the  state  are,  to  con- 
tribute at  least  one  half  the  retirement 
allowance,  to  safeguard  the  savings  of  the 
teacher  by  limitation  of  investment,  to 
guarantee  to  pay  established  withdrawal 
equities,  and  to  pay  definitely  ascertained 
annuities. 

D.  In  a  complete  system  of  retirement,  old  age 
should  be  recognized  as  a  cause  for  per- 
manent retirement;  disability  should  be 
recognized  as  a  cause  for  temporary  retire- 

66 


RETIREMENT  ALLOWANCES 

ment;  invalidism  should  be  recognized  as 
a  cause  for  temporary  or  permanent  retire- 
ment. An  equitable  plan  for  insurance 
against  these  risks  of  life  should  be  worked 
out. 
E.  The  administration  of  the  retirement  sys- 
tem should  rest  jointly  upon  the  teachers 
and  designated  state  officials. 

Conclusions  as  regards  teachers  now  in  service 

Every  argument  for  retirement  allowances  for 
teachers  yet  to  enter  the  service  applies  with 
equal,  if  not  greater,  force  to  teachers  already  in 
service.  In  the  administration  of  a  plan  for  re- 
tirement, however,  certain  departures  from  the 
principles  heretofore  laid  down  must  be  made  if 
justice  is  to  be  done  to  all.  For  example,  par- 
ticipation should  be  voluntary  rather  than  com- 
pulsory, and  the  age  limit  of  service  should  not 
be  forced  upon  teachers  not  desiring  to  avail 
themselves  of  the  benefits  of  the  system.  Further- 
more, while  the  state  may  well  enforce  an  assess- 
ment that  will  produce  one  half  the  retirement 
allowance  in  the  case  of  teachers  yet  to  enter  the 
service,  such  an  assessment  would  be  unjust  if 
applied  to  many  teachers  now  in  the  service. 

In  the  administration  of  a  plan  for  teachers 

67 


THE  TEACHER  AND  OLD  AGE 

now  in  service,  applying  sound  insurance  princi- 
ples so  far  as  possible,  three  groups  of  teachers 
appear  for  special  consideration :  — 

1.  Teachers  under  thirty  years  of  age  might 
well  enter  the  retirement  system  on  the 
same  terms  as  teachers  yet  to  enter  the  serv- 
ice, as  it  is  possible  for  them  to  make  suffi- 
cient contributions  to  pay  one  half  of  a  re- 
spectable retirement  allowance  at  age  sixty 
and  beyond. 

2.  Teachers  sixty  years  of  age  and  upwards 
can  make  very  little  contribution  to  a  re- 
tirement system.  It  should  be  expected 
that  the  state  would  virtually"  pay  these 
people  a  straight  pension,  and  a  minimum 
sum  should  be  fixed  by  law. 

3.  Between  these  groups  lies  the  group,  ages 
thirty  to  sixty,  and  they  present  a  great 
variety  of  problems.  Those  nearest  thirty 
can  make  contributions  which  will  produce 
substantially  one  half  of  an  equitable  retire- 
ment allowance.  Those  teachers  nearest 
sixty  can  make  less.  It  would  seem  just, 
therefore,  that  these  teachers  should  be  as- 
sessed a  definitely  fixed  percentage  of  their 
salary  and  allow  these  contributions  at  com- 
pound interest  to  purchase  at  retirement 

68 


RETIREMENT  ALLOWANCES 

whatever  annuity  they  will.  Then  the  state 
should  contribute  enough  to  make  up  a  de- 
finitely guaranteed  retirement  allowance  on 
the  basis  of  a  pension  for  service  prior  to  the 
time  when  the  law  went  into  effect. 


IV 


CHARACTERISTICS  OF  A  MODEL  RETIREMENT 
LAW 

The  Seventh  Annual  Report  of  the  Carnegie 
Foundation  (19 13)  enumerates  certain  essential 
and  fundamental  principles  in  an  equitable 
teachers'  pension  system,  as  follows :  — 

(a)  Compulsory  participation  and  contribu- 
tion on  the  part  of  all  who  enter  the  service. 

(b)  Retirement  annuity  earned  by  the  contri- 
bution plus  an  equal  pension  from  the 
state. 

(c)  Withdrawal  equity  in  case  of  death,  or 
permanent  withdrawal. 

(d)  A  central  unpaid  administrative  board 
with  a  paid  executive. 

The  suggestions  for  an  old-age  retirement  law 
hereafter  made  conform  to  these  principles. 

In  the  same  report,  the  Carnegie  Foundation 
proposes  a  method  of  payment  of  annuities  for 
disabihty  with  which  we  cannot  agree.  It  says: 
"There  is  one  modification  of  this  simple  scheme 
which  would  add  little  to  the  expense,  but  which 
would  cover  practically  all  that  a  pension  system 
70 


A  MODEL  RETIREMENT  LAW 

for  public-school  teachers  should  at  this  time  at- 
tempt to  do,  that  is,  the  payment  of  a  propor- 
tionate pension  for  a  given  length  of  service  in 
case  of  disability.  For  example,  a  state  might 
well  afford  to  pay,  after  fifteen  years  of  service 
and  of  contribution,  an  agreed-upon  proportion- 
ate pension  to  the  teacher  who  had  broken  down 
in  its  service." 

An  examination  of  the  financial  aspects  of  the 
situation  demonstrates  that  such  a  scheme  is  both 
inadequate  and  hazardous.  The  report  says  the 
average  salary  of  a  teacher  in  the  United  States  is 
slightly  less  than  five  hundred  dollars ;  and,  fur- 
ther, that  the  old-age  retiring  allowance  should 
probably  be  about  fifty  per  cent  of  the  salary  at 
time  of  retirement.  This  gives  us  two  hundred 
and  fifty  dollars  as  an  average  retiring  allowance 
at  age  sixty.  Now  assume  that  the  teacher  retires 
after  fifteen  years'  service  on  a  "proportionate 
part"  of  this  allowance,  and  we  arrive  at  the  pos- 
sibility of  retiring  allowances  of  one  hundred  and 
twenty-five  dollars  or  less  per  annum. 

If  disability  includes  (as  it  should)  invaHdism 
and  disabling  accidents,  temporary  and  perma- 
nent, no  further  discussion  is  needed  to  show  that 
such  an  amount  is  hopelessly  inadequate  to  meet 
the  needs;  and  it  should  be  perfectly  obvious  that 

71 


THE  TEACHER  AND  OLD  AGE 

the  solution  is  to  be  found  in  compulsory  disability 
insurance,  adjusted  to  the  occupational  risks  of 
teaching,  and  charging  a  sufi&cient  premium  to 
guarantee  reasonable  protection.  Disability  due 
to  old  age  and  disability  for  invalidism  and  acci- 
dent are  two  separate  propositions,  and  to  deal 
with  them  in  one  measure  in  such  inadequate 
financial  terms  is  inviting  '' guesswork  legisla- 
tion" that  will  jeopardize  the  whole  plan  of  old- 
age  insurance. 

In  the  following  suggestions  regarding  a  retire- 
ment law,  the  scope  of  that  law  is  limited  entirely 
to  an  old-age  measure.  Before  passing  to  that 
discussion,  it  might  be  well  to  indicate  certain 
facts  regarding  disability  insurance  and  a  method 
of  determining  the  occupational  risk  of  teaching. 

We  are  assured  by  actuaries  that  no  statistics 
are  available  to  determine  with  any  degree  of 
accuracy  the  occupational  risk  of  teaching.  It  is 
evident  that  this  risk,  while  it  may  be  greater 
or  less  than  some  other  occupations,  differs.  For 
example,  teaching  school  offers  a  different  sort  of 
risk  from  that  of  working  with  high-speed  ma- 
chinery. We  are  also  told  that  the  premium  rate 
charged  for  health  and  accident  insurance  by 
commercial  companies  is  greater  than  probably 
needs  to  be  charged  for  such  occupations  as  that  of 
72 


A  MODEL  RETIREMENT  LAW 

teaching.  This,  however,  is  largely  guesswork. 
No  one  has  yet  made  an  investigation  to  deter- 
mine the  occupational  risk,  and  it  would  be 
highly  desirable  for  some  organization  having 
funds  at  its  disposal  to  undertake  such  a  study. 

The  average  teaching  life  in  the  United  States 
has  been  computed  to  be  between  six  and  seven 
years.  As  this  period  of  employment  is  usually 
during  young  womanhood  and  manhood,  the 
total  health  risk  should  be  less  than  for  other 
occupations  that  attract  people  for  longer  years 
of  service.  One  actuary  estimates  that  a  small 
annual  premium,  perhaps  five  dollars,  paid  by  all 
teachers  in  a  state  on  a  mutual  insurance  basis, 
would  enable  such  a  body  of  teachers  to  pay 
very  satisfactory  annuities  for  totally  disabling 
sickness  or  temporary  or  permanent  disability 
due  to  accident.  If  such  be  the  case,  statistics 
should  be  collected  from  which  an  actuary  can 
compute  the  occupational  risk  and  determine  an 
adequate  premium  rate  to  cover  it.  It  is  possi- 
ble that  in  the  case  of  permanent  disability,  the 
state  should  supplement,  after  a  definite  term  of 
service,  the  insurance  so  raised.  But  such  a  fund 
should  be  separate  from  the  old-age  pension 
fund. 

To  collect  such  statistics  would  be  a  compara- 
73 


THE  TEACHER  AND  OLD  AGE 

tively  easy  task.  For  example,  it  should  be  possi- 
ble to  go  back,  say  forty  years,  in  the  records  of  a 
normal  school  and  follow  the  vital  history  of  each 
member  of  the  graduating  classes  for  five  suc- 
cessive years.  Such  an  inquiry  would  include,  in 
addition  to  the  vital  statistics,  such  information 
as  the  length  of  teaching  period,  reason  for  with- 
drawal, date  of  reentrance,  length  of  subsequent 
service,  if  any,  and  the  time  lost  for  sickness 
during  teaching  periods. 

Some  such  set  of  figures  should  be  collected  for 
graduating  classes  dating  back,  say  from  twenty 
to  fifteen  years.  It  should  be  possible,  from  rec- 
ords of  city  schools,  to  ascertain  the  same  body 
of  facts  for  two  five-year  periods,  following  out 
the  Hfe  history  of  each  member  of  the  teaching 
staff  between  certain  dates.  A  body  of  material 
could  thus  be  collected  from  which  an  actuary 
could  determine  the  occupational  risk  and  pre- 
mium rate. 

To  sum  up,  then,  disability  and  old  age  being 
entirely  different  risks,  a  complete  plan  of  insur- 
ance should  comprehend  at  least  two  distinct 
measures.  It  will  be  better  to  proceed  on  sound 
principles,  and  since  at  this  time  the  data  for 
drafting  a  law  covering  an  equitable  insurance 
scheme  against  disability  are  not  available,  the 
74 


A  MODEL  RETIREMENT  LAW 

subject  should  be  approached  first  from  the 
standpoint  of  old-age  insurance,  but  with  the  ex- 
pectation of  completing  the  scheme  as  rapidly  as 
possible  by  the  addition,  in  a  separate  measure, 
of  a  disabiHty  law. 

Characteristics  of  a  model  old-age  retirement  law 

I 
It  is  becoming  recognized  more  and  more  that 
in  such  far-reaching  and  important  legislation  as 
that  proposed  for  retirement  systems,  the  section 
following  the  enacting  clause  should  be  devoted 
to  defining  accurately  important  terms  used  in 
the  act.  The  proposed  act,  providing  for  a  retire- 
ment system  for  public-school  teachers  in  Mass- 
achusetts, contains  thirteen  definitions.  Massa- 
chusetts statutes  overlap  and  in  some  particulars 
are  apparently  inconsistent,  so  that  this  number 
need  not  necessarily  mean  that  every  state  would 
need  so  many.  In  popular  writing,  the  terms 
"annuities,"  ''pensions,"  and  "retirement  allow- 
ances" are  indiscriminately  used.  These  are  ex- 
amples of  terms,  the  meaning  of  which  should  be 
precisely  indicated  as  used  in  the  act.  In  some 
states  the  laws  are  not  clear  as  to  exactly  what  is 
a  public  school.  A  high  school  or  an  industrial 
school  may  or  may  not  be  a  public  school  within 

75 


THE  TEACHER  AND  OLD  AGE 

the  intent  of  existing  law.  A  careful  study  of  the 
statutes  and  judicial  decisions  is  essential  in 
framing  a  new  statute  so  as  to  cover  just  what 
is  intended.  Attention  to  this  important  matter 
will  doubtless  prevent  much  future  litigation. 

n 

'A  date  for  the  estabhshment  of  the  retirement 
system  should  be  set  far  enough  in  the  future  to 
allow  sufficient  time  to  organize  the  necessary 
administrative  machinery. 

Ill 

Regardless  of  any  local  pension  plans  that  may 
be  in  force  at  the  time  of  the  adoption  of  a  state- 
wide act,  a  date  should  be  fixed,  after  which  all 
teachers  entering  the  service  in  the  state  must 
become  members  of  the  retirement  system.  It 
should  be  provided  that  all  local  systems  will  in 
time  cease  to  operate. 

All  teachers  in  service  at  the  time  when  the 
act  takes  effect  should  be  permitted  to  become 
members  of  the  state  system  regardless  of  any 
expectancy  they  may  have  in  a  local  system,  but 
provision  should  be  made  that  at  no  time  after 
retirement  shall  a  person  be  in  receipt  of  both  a 
state  and  a  local  pension. 
76 


A  MODEL  RETIREMENT  LAW 

Careful  provision  should  be  made,  however, 
for  reimbursement  out  of  the  state  treasury  to 
towns  and  cities  continuing  to  pay  pensions  un- 
der local  systems  to  teachers  in  service  who  do 
not  elect  to  become  members  of  the  state  system. 

A  provision  should  be  inserted  that  teachers 
who  neglect  to  join  the  retirement  system  on  the 
specified  date  may  become  members  of  the  retire- 
ment association  thereafter  by  paying  an  amount 
equal  to  the  amount,  with  interest,  they  would 
have  paid  had  they  become  members  in  the  be- 
ginning. 

rv 

A  retirement  board  should  be  established. 
This  should  be  an  unpaid  board,  but  should  em- 
ploy a  paid  expert  secretary  as  its  executive.  Its 
membership,  duties,  and  the  method  of  filling 
vacancies  should  be  carefully  defined.  It  is  sug- 
gested that  the  official  heads  of  the  three  state 
departments  of  insurance,  banking,  and  educa- 
tion should  represent  the  state  on  this  retire- 
ment board.  Three  members  should  be  elected 
by  the  prospective  beneficiaries  from  their  own 
membership.  These  six  should  elect  a  seventh 
member,  who  should  be  neither  a  teacher  nor  a 
state  ofiicial. 

Broad  powers  should  be  vested  in  this  board, 


THE  TEACHER  AND  OLD  AGE 

such  as  power  to  fix  the  annuity  tables,  power  to 
prescribe  and  enforce  administrative  orders  upon 
school  officials  and  members  of  the  retirement 
association,  and  power  to  enforce  any  by-laws 
adopted  to  carry  out  the  intent  of  the  law. 


The  method  of  raising  funds  should  be  very 
carefully  prescribed.  The  necessary  funds  are: 
(a)  expense  fund;  (b)  pension  fund;  (c)  annuity 
fund. 

The  expense  fund  is  the  amount  necessary  to 
pay  the  administrative  expenses  of  the  system; 
it  should  be  entirely  supported  by  the  state  and 
should  be  appropriated  at  each  session  of  the 
state  legislature  on  estimates  furnished  by  the 
retirement  board. 

The  pension  fund  is  the  amount  of  money  nec- 
essary to  pay  pensions  under  the  act.  It  is  the 
state's  contribution  to  the  system,  and  should  be 
appropriated  at  each  session  of  the  legislature 
rather  than  by  building  up  an  enormous  sinking 
fund  in  anticipation  of  future  demands. 

The  annuity  fund  is  the  amount  contributed 

by  the  teachers  with  compound  interest  upon 

the  same.  It  is  raised  by  assessments  upon  the 

teachers'  wages.  It  should  be  within  the  powers 

78 


A  MODEL  RETIREMENT  LAW 

of  the  retirement  board  to  establish  an  assess- 
ment rate  within  fixed  percentages  of  the  salary, 
say  four  to  seven  per  cent.  There  should  be  no 
difficulty  about  leaving  this  flexible,  since  the 
members  of  the  association  should  have  half  the 
representation  upon  the  board  and  should  be  in 
a  position  to  respond  readily  to  the  wishes  of  the 
members. 

There  should,  however,  be  a  fixed  minimum 
assessment  below  which  no  teacher  should  pay; 
and  a  fixed  maximum  above  which  no  teacher 
should  be  permitted  to  pay.  This  minimum 
should  be  an  amount  sufficient  to  provide,  ac- 
cording to  accepted  annuity  tables,  whatever 
annuity  it  is  desired  to  pay  at  a  fixed  age.  For 
example:  thirty-five  dollars  deposited  annually 
for  thirty  years  will,  at  compound  interest  at 
three  per  cent,  pay  an  annuity  of  approximately 
one  hundred  and  fifty  dollars  at  age  sixty  years. 
It  is  possible,  then,  to  place  this  system  upon  a 
sound  insurance  basis.  Thirty  annual  contribu- 
tions of  one  hundred  dollars  will  yield  at  regu- 
lar interest  (three  per  cent)  an  amount  sufficient 
to  produce  an  annuity  of  approximately  five 
hundred  dollars  at  age  sixty. 

As  has  been  pointed  out  before,  while  a  thirty- 
five  dollar  annual  assessment  may  look  large  to 

79 


THE  TEACHER  AND  OLD  AGE 

many  teachers,  this  cost  may  rapidly  be  shifted 
over  upon  the  community  employing  the  teachers 
and  no  permanent  diminution  of  wages  will  follow. 
In  fact,  it  may  be  expected  that  wages  will  in 
some  school  systems,  at  least,  rapidly  respond  to 
this  necessary  increased  expense  to  the  teacher. 
Provision  should  be  made  that  teachers  may 
pay  assessments  during  the  entire  time  of  their 
service,  providing  that  they  may  not  contribute 
an  amount  in  excess  of  the  amount  necessary  to 
produce  an  annuity  of  five  hundred  dollars  at 
the  age  of  sixty. 

VI 

The  time  and  method  of  paying  retirement 
allowances  should  be  carefully  prescribed.  For 
example,  if  sixty  years  is  taken  as  the  age  for 
voluntary  retirement,  then  seventy  may  well  be 
taken  as  the  age  for  compulsory  retirement.  The 
teacher  should  be  definitely  guaranteed  that  the 
amount  which  he  has  contributed,  with  com- 
pound interest  thereon,  will  produce  a  definitely 
fixed  annuity.  The  state  should  pay  an  equal 
amount  in  a  pension.  At  this  point  it  is  desirable, 
especially  in  the  case  of  men  who  may  have  de- 
pendent families,  to  give  an  option  between  re- 
ceiving a  definite  annuity  and  a  smaller  annuity 
80 


A  MODEL  RETIREJ^ENT  LAW 

with    a    certain  guaranty  of   insurance.    Such 
phraseology  as  the  following  covers  this :  — 

An  annuity  of  less  amount,  payable  in  quar- 
terly payments,  as  may  be  determined  by  the 
retirement  board,  with  the  provision  that  if 
the  annuitant  dies  before  receiving  payments 
equal  to  the  sum  of  his  assessments  with  regu- 
lar interest,  the  difference  between  such  pay- 
ments and  the  amount  of  his  contributions, 
with  regular  interest,  shall  be  paid  to  his  legal 
representatives. 

This  option  is  given  by  insurance  compa- 
nies, and  the  annuity  so  fixed  by  one  company 
amounts  to  78-108  of  the  total  annuity  due.  The 
difference  is  virtually  the  premium  on  a  paid-up 
insurance. 

One  of  the  most  difiScult  sections  to  construct 
is  one  putting  a  teacher  in  service  on  an  equality 
with  teachers  yet  to  enter  the  service,  that  is  to 
say,  so  that  past  service  may  receive  from  the 
state  compensation  equal  to  that  provided  for 
future  service.  We  have  here  a  situation  involv- 
ing teachers  who  have  from  one  to  thirty  years  to 
serve;  teachers  who  have  served  varying  num- 
bers of  years  in  the  state;  some  who  can  make 
contributions  sufficient  to  produce  a  respectable 


THE  TEACHER  AND  OLD  AGE 

annuity,  others  who  cannot.  So  far  as  the  pen- 
sion goes  (the  state's  contribution),  all  teachers 
should  be  on  exactly  the  same  footing.  The  fol- 
lowing phraseology  shows  how  such  a  situation 
may  be  met:  — 

Any  teacher  in  service  when  this  act  takes  ef- 
fect who  shall  have  become  a  member  of  the  re- 
tirement association,  and  who  shall  have  served 
fifteen  years  or  more  in  the  public  schools  of  the 
state,  not  less  than  five  of  which  shall  immedi- 
ately precede  retirement,  shall  be  entitled  to  re- 
ceive a  retirement  allowance  as  follows :  — 

(a)  Such  annuity  as  his  contributions  may 
earn. 

(b)  A  pension  equal  to  the  annuity. 

(c)  An  additional  annual  pension  to  such  an 
amount  that  the  sum  of  this  additional 
pension  and  the  pension  mentioned  in  (b) 
shall  equal  the  pension  to  which  he  would 
have  been  entitled  had  he  paid  thirty  as- 
sessments on  his  average  yearly  wage  for 
the  fifteen  years  preceding  his  retirement 
at  the  rate  in  effect  at  the  time  of  his  re- 
tirement. 

{d)  A  clause  should  be  added  guaranteeing 
that   if   the   total   retirement   allowance 
82 


A  MODEL  RETIREMENT  LAW 

under  (a),  (b),  and  (c),  is  not,  say  three 
hundred  dollars,  the  state  shall  provide  a 
further  pension  sufficient  to  make  a  total 
retirement  allowance  of  three  hundred  dol- 
lars. 

Under  such  a  plan,  every  teacher  retiring, 
whether  he  retires  immediately  after  the  act  takes 
effect  or  serves  for  a  series  of  years,  is  guaranteed 
three  hundred  dollars.  He  pays  assessments  so 
long  as  he  may  remain  in  service  after  the  act 
takes  effect.  His  annuity  is  guaranteed,  and  his 
pension  is  on  the  same  basis  as  if  his  pension 
were  reckoned  on  future  service. 

VII 

Provision  should  be  made  for  the  return  of  all 
assessments,  with  interest  thereon,  in  case  the 
teacher  withdraws  for  any  cause  prior  to  becoming 
eligible  to  retirement.  It  is  contended  by  many 
people  that  if  this  withdrawal  takes  place  after 
ten  years  of  service,  the  amount  should  be  repaid 
in  the  form  of  an  annuity  in  order  to  safeguard 
the  invested  savings  of  the  teacher.  In  case 
a  teacher  withdraws  and  dies  before  receiving 
the  amount  of  his  contributions,  the  difference 
should  be  paid  to  his  legal  heirs. 

83 


THE  TEACHER  AND  OLD  AGE 


VIII 

Provision  should  be  made  exempting  the  an- 
nuity fund  from  taxation,  attachment,  or  assign- 
ment, and  all  funds  that  are  invested  in  personal 
property  should  be  exempt  from  taxation. 

IX 

The  duties  of  local  school  oflScials  in  executing 
the  provisions  of  the  act  should  be  formulated 
with  great  care.  For  example,  it  should  be  the 
duty  of  the  school  officials  — 

1.  To  notify  every  applicant  for  a  teaching 
position  of  his  duties  and  obligations  under 
the  retirement  act. 

2.  To  certify  to  the  retirement  board  the 
names  of  all  teachers  in  their  employ  to 
whom  the  act  applies. 

3.  To  notify  the  retirement  board  of  the  em- 
ployment of  new  teachers,  removals,  with- 
drawals, changes  in  salary. 

4.  To  furnish  all  information  required  by  the 
retirement  board  in  the  discharge  of  its 
duties. 

5.  To  deduct,  as  directed  by  the  retirement 
board,  from  the  salary  due  each  teacher,  all 

84 


A  MODEL  RETIREMENT  LAW 

amounts  due  as  contributions  to  the  an- 
nuity fund. 
6.  To  keep  careful  records  as  required  by  the 
retirement  board. 

X 

The  treasurer  of  each  town  or  city  should  for- 
ward to  the  state  treasurer  all  amounts  due  as 
deducted  by  employing  school  authorities.  The 
state  treasurer  should  be  the  custodian  of  the 
annuity  fund,  should  invest  it,  and  should  be 
obliged  by  law  to  furnish  to  the  retirement  board 
an  annual  statement  of  the  condition  of  the  an- 
nuity fund.  The  state  treasurer  should  also,  on 
order  of  the  retirement  board,  pay  all  pensions 
and  annuities. 

XI 

In  many  states,  the  question  of  absorbing 
local  pension  systems  into  a  state  system  will  be 
a  vexing  one.  A  great  amount  of  discrimination 
must  be  exercised  in  order  to  preserve  the  rights 
of  all  prospective  beneficiaries  of  local  pension 
systems,  on  the  one  hand,  and  local  taxpayers, 
on  the  other.  The  method  of  taking  over  local 
retirement  systems  by  the  New  York  state  sys- 
tem is  an  example  of  unfortunate  legislation. 

85 


THE  TEACHER  AND  OLD  AGE 

Suffice  it  to  say  that  actuaries  have  declared  the 
New  York  state  retirement  system  as  absolutely 
bankrupt,  and  the  law  in  crying  need  of  amend- 
ment. Sections  similar  to  the  two  following  will 
go  a  long  way  toward  solving  the  difficulty :  — 

Whenever  a  town  or  city  retires  a  teacher 
after  the  adoption  of  this  act,  and  pays  such 
teacher  a  pension  in  accordance  with  any  pension 
system  previously  authorized  by  law,  and  the 
school  officials  of  said  town  or  city  certify  under 
oath  to  the  retirement  board  to  the  amount  of  said 
pension,  said  town  or  city  shall  be  reimbursed 
therefor  annually  from  the  state  treasury;  pro- 
vided that  no  such  reimbursement  shall  be  in  ex- 
cess of  the  amount,  as  determined  by  the  retire- 
ment board,  to  which  said  teacher  would  have 
been  entitled  as  a  pension  had  he  become  a  mem- 
ber of  the  retirement  association  under  the  pro- 
visions of  this  act. 

On  or  before  (here  insert  a  date)  of  each  ses- 
sion of  the  legislature,  the  retirement  board  shall 
present  to  the  legislature  a  statement  of  the 
amount  expended  previous  to  the  preceding  first 
day  of  December  by  cities  and  towns  in  the  pay- 
ment of  pensions  under  the  provisions  of  the 
preceding  paragraph,  for  which  such  cities  and 
86 


A  MODEL  RETIREMENT  LAW 

towns  should  receive  reimbursement.  On  the 
basis  of  such  a  statement,  the  General  Court  may 
make  an  appropriation  for  the  reimbursement 
of  such  cities  and  towns  up  to  the  first  day  of 
December. 

By  means  of  such  provisions  the  rights  of  all 
parties  are  protected,  and  by  a  provision  to  the 
effect  that  all  new  teachers  must  become  mem- 
bers of  the  state  system  and  not  the  local  system, 
the  principle  of  state  pensions  is  guaranteed, 
and  it  will  only  be  a  limited  number  of  years 
when  all  local  pension  systems  will  be  wiped  out 
and  a  complete  state  system  set  up. 

XII 

A  date  should  be  set  after  which  local  pension 
schemes,  if  any  exist  in  the  state,  shall  become 
inoperative  for  teachers  entering  the  service. 

xni 

Some  court  should  be  specifically  authorized, 
as  having  jurisdiction  in  the  first  instance,  in  case 
of  dispute  between  a  beneficiary  and  the  retire- 
ment board. 


GETTING  LEGISLATION  1 

It  will  be  apparent  to  those  who  have  read  thus 
far  that  the  problem  of  teachers'  pensions  is  by- 
no  means  as  simple  as  it  was  thought  not  long 
since,  and  no  campaign  for  legislation  should  be 
undertaken  without  serious  study  of  all  the  fac- 
tors involved.  It  is  of  vastly  greater  importance 
than  simply  relieving  the  schools  of  a  few  out- 
worn teachers,  and  the  time  has  arrived  in  the 
development  of  such  legislation  when  we  should 
approach  the  subject  with  certain  well-ascer- 
tained facts  and  principles  in  mind.  Much  of 
this  legislation  heretofore  has  been  hasty  and 
ill-considered,  and  some  of  it  has  been  in  effect 
long  enough  to  show  that  the  anticipated  bene- 
fits do  not  accrue ;  hence,  in  some  states  there  is 
already  a  demand  for  amendment  and  changes 
of  various  sorts  both  in  local  and  state  plans. 

The  ideal  method  of  legislation  would  be  the 
enactment  of  two  separate  measures  —  one  ap- 
plying to  teachers  in  service  on  a  certain  date; 

1  See  also, "  Teachers'  Pension  Legislation  in  Massachusetts," 
W.  I.  Hamilton,  School  Board  Journal,  August,  1913. 


GETTING  LEGISLATION 

the  other  applying  to  teachers  entering  the  serv- 
ice after  that  date.  So  far  as  is  known  this 
method  has  never  been  followed  in  this  country, 
but  from  now  on  it  should  receive  careful  con- 
sideration. There  is  a  clear  line  of  demarcation 
between  the  two  groups  of  teachers  mentioned, 
and  certain  provisions  can  be  made  affecting  new 
teachers  that  would  be  neither  equitable  nor  just 
in  the  case  of  teachers  already  in  service.  Con- 
tributory systems  can  be  made  compulsory 
for  teachers  entering  the  service  as  one  of  the 
terms  of  such  service,  but  in  the  case  of  teachers 
already  in  service  participation  should  be  vol- 
untary. 

As  a  further  illustration  it  may  be  pointed  out 
that  new  teachers  can  be  required  to  teach  a 
sufficient  length  of  time  to  guarantee  a  reason- 
able annuity  yielded  by  their  own  contributions, 
whereas  in  the  case  of  teachers  already  in  the  serv- 
ice, some  of  whom  should  be  retired  at  once,  the 
state  may  expect  to  pay  a  larger  proportionate 
share  of  the  retirement  allowance  than  it  would 
for  new  teachers.  In  many  of  our  states,  equities 
in  existing  pension  systems  have  been  built  up  by 
teachers  now  in  service  which  they  do  not  wish 
to  give  up ;  whereas  in  the  case  of  new  teachers  a 
way  should  be  found  to  require  all  new  teachers 
89 


THE  TEACHER  AND  OLD  AGE 

to  enter  the  state  system,  and  this  means  the  ulti- 
mate abandonment  of  all  existing  local  systems. 

It  should  be  anticipated  that  no  new  system 
will  be  inaugurated  that  will  not  be  financially 
sound  and  provide  definitely  ascertained  annui- 
ties. It  has  already  become  evident  that  certain 
local  systems  do  not  meet  these  conditions,  and 
from  every  standpoint  it  would  be  far  better  for 
teachers  in  those  places  to  seek  a  method  of  par- 
ticipation in  a  sound  state  system. 

Opposition  to  this  plan  for  two  laws  is  almost 
certain  to  develop.  Teachers  fear  that  a  legisla- 
ture will  enact  a  law  costing  little  or  nothing  for 
its  execution  until  after  a  long  period  of  years  has 
elapsed,  but  might  not  be  willing  to  enact  an- 
other law  providing  for  them  on  an  equal  finan- 
cial basis,  calhng  for  immediate  expenditure. 
Favorably  disposed  members  of  the  legislature, 
fearing  the  opposition  of  forces  arrayed  against 
all  forms  of  state  pensions,  frequently  will  mani- 
fest a  desire  to  deal  with  the  questions  in  one 
measure. 

There  will  be  less  difficulty  in  states  in  which 
local  pension  systems  are  little  developed,  as  in 
these  states  all  that  is  necessary  is  the  education 
of  the  public  to  the  support  of  sound  social  in- 
surance principles.  There  will  be  more  and  more 
90 


GETTING  LEGISLATION 

opposition  as  local  pension  systems  may  extend; 
and  when  certain  vested  rights  are  built  up 
through  a  long  term  of  years,  the  absorption  of 
local  pension  systems  into  a  sound  state  system 
becomes  an  extremely  difficult  and  complicated 
question.  Indeed,  it  is  not  clear  that  it  has  yet 
been  successfully  done  in  this  country. 

The  New  York  state  system  is  an  unfortunate 
example  of  an  attempt  to  pass  a  satisfactory  law 
providing  for  all  teachers  in  the  state,  at  the  same 
time  catering  to  certain  prejudices,  more  or  less 
well  considered,  on  the  part  of  many  teachers 
already  provided  with  pensions  from  local  sources. 
This  experience  clearly  indicates  the  necessity  for 
a  different  method  of  procedure. 

The  writer  does  not  undertake  to  lay  out  a 
program  that  will  fit  all  the  states  not  now  pro- 
viding teachers'  pensions.  Such  effort  would  be 
useless,  as  local  conditions  make  a  vast  deal  of 
difference  in  dealing  with  any  question  of  legis- 
lation. While  no  complete  statement  can  be 
made,  certain  facts  can  now  be  regarded  as  estab- 
lished; and  it  is  urged  that  when  any  legislation 
is  projected,  it  shall  be  with  the  idea  of  providing 
a  sound  and  equitable  system  for  all  teachers 
entering  the  service  on  and  after  a  fixed  date 
and  the  immediate  or  gradual  abandonment  of 

91 


THE  TEACHER  AND  OLD  AGE 

all  local  systems.  With  this  principle  in  mind  any 
necessary  adjustments  can  be  made  for  taking 
care  of  teachers  now  in  the  service. 

Only  one  method  can  be  followed  which  will 
bring  about  this  result,  namely,  the  securing  of  a 
unanimous  public  sentiment;  and  the  public  in 
this  case  includes  at  least  the  teachers  pro- 
vided with  pensions  under  local  schemes,  other 
teachers  not  provided  with  pensions,  prospective 
teachers,  and  all  the  citizens  of  the  state  inter- 
ested in  social  welfare.  Public  sentiment  must  be 
aroused  to  recognize  that  the  pension  provided 
by  the  state  tends  to  the  ultimate  good  of  all 
the  schools  of  the  state,  whereas  local  pension 
systems  may  perpetuate  certain  already  existing 
inequalities  in  the  public-school  system.  The 
support  of  a  method  that  will  secure  this  unani- 
mous public  opinion  indicates  a  degree  of  profes- 
sional spirit  greatly  to  be  desired  in  the  teachers 
of  the  country. 

If  it  is  proved  to  be  impossible  to  pass  two 
separate  bills,  old  teachers  and  new  teachers 
should  be  dealt  with  in  separate  sections  of  the 
one  bill;  and  there  should  be  a  clear  line  of  de- 
marcation in  the  provisions  affecting  these  teach- 
ers, even  at  the  expense  of  repetitions,  and  the 
provisions  affecting  each  group  should  be  clear 
92 


GETTING  LEGISLATION 

and  distinct  so  as  to  avoid  confusion  in  the  minds 
of  legislators,  the  public,  and  the  teachers  af- 
fected. When  such  a  bill  has  been  drawn,  with 
the  experience  we  now  have  there  can  be  no  ex- 
cuse for  not  submitting  the  same  to  an  actuary, 
who  will  be  able  to  state  to  a  close  approxima- 
tion the  amount  allowed  each  teacher  under  its 
terms,  and  pass  upon  the  financial  soundness  of 
the  proposed  scheme. 

As  pointed  out  in  a  previous  paragraph,  there 
is  bound  to  be  a  growing  amount  of  difficulty 
in  merging  local  pension  systems  into  the  state 
system,  because  in  many  states  these  local  sys- 
tems authorized  by  law  have  grown  to  consider- 
able magnitude.  It  is  always  difficult  to  win  to 
new  things  those  who  already  have  fixed  rights 
in  the  old.  It  is  the  inevitable  tendency  on  the 
part  of  the  holders  thereof  to  let  well  enough 
alone  and  to  look  with  suspicion  upon  the  new. 
Furthermore,  in  many  sections  of  the  country,  if 
not  in  all,  there  is  a  formidable  amount  of  local 
pride,  and  a  great  faith  in  local  autonomy,  along 
with  considerable  distrust  for  centralization. 

It  is  difiicult,  and  perhaps  impossible,  to  state 
in  terms  of  dollars  and  cents  the  exact  amount  of 
annuities  or  future  financial  benefits  under  such 
a  plan  as  has  been  proposed  herein,  while  many 

93 


THE  TEACHER  AND  OLD  AGE 

existing  plans  provide  for  flat  pensions.  The 
apparent  security  of  local  pensions  has  proved 
unfounded  under  several  existing  plans,  but  wher- 
ever it  exists,  one  can  count  on  opposition  to  the 
plan  herein  proposed.  It  has  been  demonstrated 
that  it  is  impossible  in  some  sections  of  the  coun- 
try to  get  teachers  now  in  service  willingly  to 
abandon  their  local  plans  and  come  into  a  state 
system. 

Since  local  pension  systems  generally  develop 
first  in  large  cities,  an  attempt  to  force  all  teach- 
ers into  a  state  system  is  likely  to  develop  an 
undesirable  antagonism  between  the  teachers  of 
those  cities  and  the  teachers  elsewhere  in  the 
state.  There  is  always  the  fear  on  the  part  of 
many  taxpayers  that  they  may  be  doubly  taxed 
for  the  support  of  both  local  and  state  plans. 
This  opposition  can  be  disposed  of  by  a  proper 
system  of  reimbursement. 

Participation  in  a  state  system  and  abandon- 
ment of  local  systems  should  not  be  insisted  upon 
to  the  detriment  of  other  important  interests, 
but  if  in  the  preliminary  period  we  can  clear  the 
ground  by  unanimous  agreement  that  all  new 
teachers  must  come  into  a  state  system,  and  all 
local  plans  must  then  gradually  be  abandoned, 
we  have  greatly  simphfied  the  difficulties  in 
94 


GETTING  LEGISLATION 

getting  satisfactory  legislation.  We  should  go 
further  wherever  possible  and  open  the  way  for 
teachers  already  in  service  anywhere  in  the  state 
to  enter  the  state  system,  because  any  pension 
system  based  upon  sound  insurance  principles 
succeeds  in  proportion  to  the  number  of  people 
in  it. 

Furthermore,  without  such  a  provision  there 
will  always  be  the  question  of  the  status  of  teach- 
ers who  begin  teaching  under  the  provision  of  the 
state  system  and  then  at  a  later  period  go  to  some 
city  supporting  a  local  system.  Such  a  situation 
is  now  found  in  the  State  of  Massachusetts,  where 
Boston  teachers  are,  at  their  desire,  excluded  from 
the  state  system.  It  is  not  clear  what  will  be  the 
status  of  a  teacher  who  serves  fifteen  or  twenty 
years  outside  of  that  city  and  then  enters  the 
service  of  the  Boston  pubUc  schools. 

It  would  seem  that  there  is  no  sound  argument 
for  the  permanent  exclusion  of  any  group  of 
teachers  from  the  operation  of  a  state  law.  No 
municipal  pension  law  is  so  hberal  that  its  finan- 
cial benefits  should  not  be  duplicated  by  the  state 
law,  when  the  municipal  plan  is  sound.  Some  of 
them  are  not.  Even  so  good  a  system  as  that 
of  New  York  City  has  been  supposed  to  be  has 
reached  a  point  where  the  secretary  says,  in  his 

95 


THE  TEACHER  AND  OLD  AGE 

latest  annual  report,  "It  is  time  our  pension  law 
was  rewritten  on  sound  actuarial  lines."  With 
proper  care  there  is  every  likelihood  that  the 
state  system  will  be  sound  and  permanent; 
whereas  many  local  systems  are  temporary  and 
expedient,  and  up  to  date  have  been  looked  upon 
as  a  method  for  relieving  the  schools  of  certain 
outworn  teachers  rather  than  as  a  large  problem 
of  social  insurance. 

Approaching  the  whole  problem  broadly,  how- 
ever, after  an  organization  has  been  effected  and 
a  public  sentiment  developed  that  will  support  a 
state  teachers'  pension  system,  it  would  seem 
advisable  for  a  commission  to  be  appointed  that 
will  study  the  problem  scientifically  and  in  the 
light  of  all  available  information.  In  all  prob- 
ability, such  a  commission,  if  given  sufficient 
time,  could  work  out,  in  states  where  there  are 
local  pension  systems,  a  merger  scheme  that 
would  be  satisfactory  to  the  local  communities 
on  the  side  of  taxation  and  provide  justly  for  all 
teachers  concerned. 

It  would  be  well  for  such  a  commission  to  re- 
port in  advance  of  bringing  the  pension  bill  be- 
fore the  legislature;  but  if  such  a  procedure  is 
not  followed,  definite  provision  for  such  scientific 
study  should  be  made  in  the  proposed  law.  It 
96 


GETTING  LEGISLATION 

might  be  possible  to  provide  for  a  state  board  of 
retirement,  having  power  to  make  such  adjust- 
ments as  are  necessary,  subject  to  the  approval 
of  the  governor.  While  such  provision  could  not 
pass  in  many  states  because  of  local  prejudices, 
there  is  a  growing  tendency  to  legislate  with  more 
care  and  more  accurate  knowledge  than  hereto- 
fore. Wisconsin  has  given  us  splendid  examples 
of  this  tendency.  There  is  the  further  tendency 
to  legislate  in  broad  general  terms,  leaving  the 
working-out  of  details  to  responsible  boards  and 
commissions. 

It  is  inexpedient,  and  probably  in  the  end  it  will 
prove  impossible,  to  have  two  kinds  of  pension 
systems  for  teachers  in  operation  simultaneously 
in  any  state.  Doubtless  for  some  time  we  shall 
continue  to  have  the  attempt  made.  It  cannot 
be  too  strongly  urged,  however,  that  a  beginning 
should  be  made  in  any  legislation  hereafter  by  in- 
sisting that  all  new  teachers  entering  the  service 
must  enter  the  state  retirement  system  regard- 
less of  the  operation  of  any  local  system.  With 
this  provision  insisted  upon,  we  might  then  have 
a  number  of  local  systems  in  process  of  merging; 
that  is  to  say,  some  teachers  in  any  town  or  city 
will  be  prospective  beneficiaries  of  the  local  sys- 
tem and  others  of  the  state  system.  The  teachers 

97 


THE  TEACHER  AND  OLD  AGE 

under  local  systems  will  gradually  work  out  of 
the  service  by  resignation,  death,  and  retirement, 
and  at  the  close  of  say  thirty  years  we  can  expect, 
in  any  state  where  this  sort  of  adjustment  is 
made,  the  full  operation  of  a  complete  state  sys- 
tem. 

While  the  merging  process  thus  indicated  is 
going  on  under  the  system  of  taxation  prevailing 
in  most  states,  no  town  or  city  should  be  ex- 
empted from  taxation  to  maintain  the  state  sys- 
tem, inasmuch  as  some  of  the  teachers  in  every 
town  and  city  in  the  state  would  be  prospective 
beneficiaries  of  the  plan.  It  should  be  borne  in 
mind,  however,  that  since  many  teachers  for 
some  years  will  be  under  a  local  system,  some 
method  of  equitable  reimbursement  therefor 
must  be  worked  out,  and  up  to  date  it  would 
seem  that  the  Massachusetts  system  (see  section 
13)  proposes  the  most  satisfactory  method. 


APPENDIX  A 

State  teachers'  pension  systems  are  sure  to  become 
the  rule  rather  than  the  exception  in  this  country. 
Nine  complete  state  systems  are  now  in  existence, 
four  of  which  were  set  up  during  the  legislative  year 
191 2-13.  In  Connecticut  a  law  was  put  through  the 
legislature  but  vetoed  by  the  governor.  In  Michi- 
gan a  law  was  defeated  by  a  narrow  margin  in  the 
senate.  In  these  states,  and  in  at  least  four  others, 
campaigns  are  now  under  way  looking  toward  the 
passage  of  laws  at  the  next  session  of  the  legislatures. 
In  view  of  these  facts,  and  also  because  sufficient 
experience  has  already  accumulated  to  render  cer- 
tain general  statements  possible  and  safe,  the  writer 
considers  that  this  discussion  would  be  incomplete 
without  the  presentation  of  the  draft  of  an  act  for 
the  establishment  of  a  teachers'  retirement  system 
actually  in  existence.  For  this  purpose  the  Massa- 
chusetts Act  (1913)  has  been  selected.  President 
Pritchett,  of  the  Carnegie  Foundation,  has  pro- 
nounced this  "  the  best  and  most  carefully  considered 
law  for  teachers'  pensions  yet  proposed  in  this  coun- 
try." It  conforms  more  clearly  than  any  other  to 
the  principles  heretofore  discussed  in  this  study,  and 
on  the  whole  marks  a  step  forward  in  this  sort  of 
legislation.  There  are,  however,  certain  defects  and 
"danger  points"  in  the  law.  These,  as  well  as  some 

99 


APPENDIX 

points  of  excellence,  are  briefly  discussed  in    the 
footnotes  to  the  text  of  the  law. 

It  is  to  be  hoped  that  this  old-age  measure  may  be 
supplemented  by  an  equally  good  measure  providing 
for  retirement  for  disability  before  age  sixty  years. 
The  legislature  of  191 1  directed  the  Massachusetts 
Board  of  Education  to  investigate  the  matter  of 
teachers'  pensions  and  report  on  the  same,  but  failed 
to  provide  any  funds  for  the  research  work  neces- 
sary before  any  adequate  report  could  be  made  on 
the  health  risk,  or  disability  risk,  of  the  teacher.  The 
board  wisely  confined  its  efforts  to  the  field  of  an  old- 
age  pension,  in  which  there  are  sufficient  data  and 
experience  to  justify  the  enactment  of  a  law. 


[Chap.  832] 

An  Act  to  establish  a  retirement  system 
for  public  school  teachers 

Be  it  enacted,  etc.,  as  follows:  — 

Section  i.  The  following  words  and  phrases  as 
used  in  this  act,  unless  a  different  meaning  is  plainly 
required  by  the  context,  shall  have  the  following 
meanings:  — 

(i)  "  Retirement  system  "  shall  mean  the  arrange- 
ment provided  in  this  act  for  payment  of  annuities 
and  pensions  to  teachers. 

(2)  "Annuities"  shall  mean  payments  for  life  de- 
rived from  contributions  from  teachers. 
100 


APPENDIX 

(3)  "Pensions"  shall  mean  payments  for  life  de- 
rived from  contributions  from  the  commonwealth. 

(4)  "Teacher"  shall  mean  any  teacher,  principal, 
supervisor  or  superintendent  employed  by  a  school 
committee,  or  board  of  trustees,  in  a  public  day 
school  within  the  commonwealth. 

(5)  "Public  school"  shall  mean  any  day  school 
conducted  within  this  commonwealth  under  the 
order  and  superintendence  of  a  duly  elected  school 
committee  and  also  any  day  school  conducted  under 
the  provisions  of  chapter  four  hundred  and  seventy- 
one  of  the  acts  of  the  year  nineteen  hundred  and 
eleven. 

(6)  "Regular  interest"  shall  mean  interest  at 
three  per  cent  per  annum,  compounded  annually  on 
the  last  day  of  December  of  each  year. 

(7)  "Retirement  board"  shall  mean  the  teachers' 
retirement  board,  as  provided  in  section  four  of  this 
act. 

(8)  "Retirement  association"  shall  mean  the 
teachers'  retirement  association,  as  provided  in  sec- 
tion three  of  this  act. 

(9)  "  Expense  fund  "  shall  mean  the  fund  provided 
for  in  paragraph  numbered  one  in  section  five  of 
this  act. 

(10)  "Annuity  fund"  shall  mean  the  fund  pro- 
vided for  in  paragraph  numbered  two  in  section  five 
of  this  act. 

(11)  "Pension  fund"  shall  mean  the  fund  pro- 
vided for  in  paragraph  numbered  three  in  section  five 
of  this  act. 

lOI 


APPENDIX 

(12)  "School  year"  shall  mean  the  twelve  months 
from  the  first  day  of  July  of  any  year  to  the  thirtieth 
of  June  next  succeeding. 

(13)  ''Assessments"  shall  mean  the  annual  pay- 
ments to  the  annuity  fund  by  members  of  the  asso- 
ciation. 

ESTABLISHMENT  OF  A  TEACHERS*  RETIREMENT 
SYSTEM 

Section  2.  A  teachers'  retirement  system  shall  be 
established  on  the  first  day  of  July,  nineteen  hun- 
dred and  fourteen, 

teachers'   RETIREMENT  ASSOCIATION 

Section  3.  A  teachers'  retirement  association  shall 
be  organized  among  the  teachers  in  the  public  schools 
as  follows:  — 

(i)  All  teachers,  except  those  specified  in  para- 
graph (3)  of  this  section,  who  enter  the  service  of 
the  public  schools  for  the  first  time  on  or  after  July 
first,  nineteen  hundred  and  fourteen,  shall  become 
thereby  members  of  the  association. 

(2)  All  teachers,  except  those  specified  in  para- 
graph (3)  of  this  section,  who  shall  have  entered  the 
service  of  the  public  schools  before  June  thirtieth, 
nineteen  hundred  and  fourteen,  may  at  any  time  be- 
tween July  first,  nineteen  hundred  and  fourteen,  and 
September  thirtieth,  nineteen  hundred  and  four- 
teen, upon  application  in  writing  to  the  commis- 
sioner of  education,  become  members  of  the  retirement 
102 


APPENDIX 

association.  Any  teacher  failing  to  do  so  may  there- 
after become  a  member  of  the  retirement  board  ^  by 
paying  an  amount  equal  to  the  total  assessments, 
together  with  regular  interest  thereon,  that  he  would 
have  paid  if  he  had  joined  the  retirement  associa- 
tion on  September  thirtieth,  nineteen  hundred  and 
fourteen. 

(3)  Teachers  in  the  service  of  the  public  schools  of 
the  city  of  Boston  shall  not  be  included  as  members 
of  the  retirement  association.^ 


STATE   TEACHERS     RETIREMENT  BOARD 

Section  4.  (i)  The  management  of  the  retirement 
system  is  hereby  vested  in  the  teachers'  retirement 
board,  consisting  of  seven  members:  the  insurance 
commissioner  for  the  commonwealth,  the  bank  com- 
missioner for  the  commonwealth,  the  commissioner 
of  education  for  the  commonwealth,  three  members 
of  the  retirement  association  and  one  other  person. 
Upon  organization  of  the  retirement  association  the 
members  thereof  shall  elect  from  among  their  num- 

1  This  is  obviously  an  error,  the  context  requires  "associa- 
tion" instead  of  "board." 

*  This  violates  the  principle  heretofore  laid  down  (iii,  page 
76,  also  page  95)  that  all  local  pension  systems  should  ulti- 
mately be  absorbed  into  a  state  system.  The  Boston  act  gives 
part  pension  for  disability  prior  to  age  sixty-five  years;  the 
state  act  does  not  recognize  disability  before  age  sixty  years  as 
cause  for  retirement.  The  Boston  teachers  were  unwilling  to 
surrender  this  right,  and  in  order  to  get  any  legislation,  this 
provision  was  necessary. 

103 


APPENDIX 

ber  in  a  manner  to  be  approved  by  the  insurance 
commissioner,  the  bank  commissioner  and  the  com- 
missioner of  education,  three  persons  to  serve  upon 
the  retirement  board,  one  member  to  serve  for  one 
year,  one  for  two  years  and  one  for  three  years,  and 
thereafter  the  members  of  the  retirement  association 
shall  elect  annually  from  among  their  number  in  a 
manner  to  be  approved  by  the  retirement  board  one 
person  to  serve  upon  the  retirement  board  for  the 
term  of  three  years.  The  seventh  member  of  the  re- 
tirement board  shall  be  elected  annually  by  the  other 
six  to  serve  for  the  term  of  one  year.^  On  a  vacancy 
occurring  on  the  board,  a  successor  of  such  person 
whose  place  has  become  vacant  shall  be  chosen  in 
the  same  manner  as  his  predecessor  to  serve  until  the 
next  annual  election.  Until  the  organization  of  the 
retirement  association  and  the  election  of  three  rep- 
resentatives therefrom,  the  insurance  commissioner, 
the  bank  commissioner  and  the  commissioner  of  edu- 
cation shall  be  empowered  to  perform  the  duties  of 
the  retirement  board. 

(2)  The  members  of  the  retirement  board  shall 
serve  without  compensation,  but  they  shall  be  reim- 
bursed from  the  expense  fund  of  the  retirement  asso- 
ciation for  any  expenditures  or  loss  of  salary  or  wages 
which  they  may  incur  through  serving  on  the  board. 
All  claims  for  reimbursement  on  this  account  shall  be 
subject  to  the  approval  of  the  governor  and  council. 

'  This  would  have  been  stronger  if  provision  had  been  made 
for  appointment  of  the  seventh  member  by  the  governor,  in 
case  of  failure  to  elect  after  a  reasonable  time. 
104 


APPENDIX 

(3)  The  retirement  board  shall  have  power  to 
make  by-laws  and  regulations  not  inconsistent  with 
the  provisions  of  this  act ;  and  to  employ  a  secretary 
who  shall  give  a  bond  in  such  amount  as  the  board 
shall  approve,  and  clerical  and  other  assistance  as 
may  be  necessary.^  The  salaries  shall  be  fixed  by  the 
board,  with  the  approval  of  the  governor  and  council. 

(4)  The  retirement  board  shall  provide  for  the 
payment  of  retirement  allowances  and  such  other 
expenditures  as  are  required  by  the  provisions  of 
this  act. 

(5)  The  retirement  board  shall  adopt  for  the  re- 
tirement system  one  or  more  mortality  tables,  and 
shall  determine  what  rates  of  interest  shall  be  estab- 
lished in  connection  with  such  tables,  and  may  later 
modify  such  tables  or  prescribe  other  tables  to  repre- 
sent more  accurately  the  expense  of  the  retirement 
system,  or  may  change  such  rates  of  interest,  and 
may  determine  the  application  of  the  changes  made. 

(6)  The  retirement  board  shall  perform  such 
other  functions  as  are  required  for  the  execution  of 
the  provisions  of  this  act. 

CREATION   OF   FUNDS 

Section  5.  The  funds  of  the  retirement  system 
shall  consist  of  an  expense  fund,  an  annuity  fund  and 
a  pension  fund. 

(i)  The  expense  fund  shall  consist  of  such  amounts 

*  This  is  an  awkward  construction,  although  the  meaning  is 
probably  clear. 


APPENDIX 

as  shall  be  appropriated  by  the  general  court  from 
year  to  year  on  estimates  submitted  by  the  retire- 
ment board  to  defray  the  expense  of  the  administra- 
tion of  this  act,  exclusive  of  the  payment  of  retire- 
ment allowances. 

(2)  The  annuity  fund  shall  consist  of  assessments 
paid  by  members  of  the  retirement  association,  and 
interest  derived  from  investments  of  the  annuity 
fund.  Each  member  of  the  retirement  association 
shall  pay  into  the  annuity  fund,  by  deduction  from 
his  salary  in  the  manner  provided  in  section  nine, 
paragraph  five,  of  this  act,  such  assessments  upon 
his  salary  as  may  be  determined  by  the  retirement 
board.  The  rate  of  assessment  shall  be  established 
by  the  retirement  board  on  the  first  day  of  July  of 
each  year  after  a  prior  notice  of  at  least  three  months, 
and  shall  at  any  given  time  be  uniform  for  all  mem- 
bers of  the  retirement  association,  and  shall  not  be 
less  than  three  per  cent  nor  more  than  seven  per 
cent  of  the  members'  salary  :  ^  provided,  however,  that 
when  the  total  sum  of  assessments  on  the  salary  of 
any  member  at  the  rate  established  by  the  retire- 
ment board  would  amount  to  more  than  one  hun- 
dred dollars  or  less  than  thirty-five  dollars^  for  any 

'  Objection  has  been  raised  to  this  provision.  The  claim  is 
made  that  the  power  to  fix  the  assessment  rate  should  not  be 
vested  in  the  retirement  board.  Inasmuch  as  the  beneficiaries 
have  a  fair  representation  on  the  board,  there  is  small  danger 
of  any  unjust  or  arbitrary  misuse  of  authority. 

^  Thirty  payments  of  thirty-five  dollars  each  will  produce 
an  annuity  of  one  hundred  and  fifty  dollars  at  age  sixty 
years.  Since  the  pension  equals  the  annuity,  every  teacher 
106 


APPENDIX 

school  year,  such  member  shall  in  lieu  of  assessments 
at  the  regular  rate  be  assessed  one  hundred  dollars 
a  year  or  thirty-five  dollars  a  year  as  the  case  may  be, 
payable  in  equal  instalments  to  be  assessed  for  the 
number  of  months  during  which  the  schools  of  the 
community  in  which  such  member  is  employed  are 
commonly  in  session.  Any  member  of  the  retire- 
ment association  who  shall  for  thirty  years  have  paid 
regular  assessments  to  the  annuity  fund  as  provided 
herein,  shall  be  exempt  from  further  assessments; 
but  such  member  may  thereafter,  if  he  so  elects,  con- 
tinue to  pay  his  assessments  to  the  fund.  No  mem- 
ber so  electing  shall  pay  further  assessments  after  the 
total  sum  of  assessments  paid  by  him  shall  at  any 
time  have  amounted,  with  regular  interest,  to  a  sum 
sufi6cient  to  purchase  an  annuity  of  five  hundred  dol- 
lars at  age  sixty  ;^  and  interest  thereafter  accruing 
shall  be  paid  to  the  member  at  the  time  of  his  retire- 
ment. 

(3)  The  pension  fund  shall  consist  of  such  amounts 

retiring  under  the  terms  of  the  act  is  practically  guaranteed  a 
minimum  retirement  allowance  of  three  hundred  dollars.  See 
also  Section  6,  (5). 

^  The  amount  necessary  to  yield  an  annuity  of  five  hundred 
dollars  at  age  sixty  years  will  yield  very  nearly  seven  hundred 
and  fifty  dollars  at  age  seventy  years.  Hence  it  will  be  possible 
for  teachers  paying  the  maximum  assessments  (one  hundred 
dollars  per  annum)  for  a  long  term  of  years  to  retire  on  an  al- 
lowance of  fifteen  hundred  dollars  if  they  continue  in  service 
until  age  seventy  years.  As  an  offset  to  the  possible  tempta- 
tion to  remain  in  service  too  long  for  the  sake  of  building  up  a 
larger  equity,  provision  is  made  in  Section  6,  (i),  for  retirement 
after  age  sixty  years  by  the  school  committee. 
107 


APPENDIX 

as  shall  be  appropriated  by  the  general  court  from 
time  to  time  on  estimates  submitted  by  the  retire- 
ment board  for  the  purpose  of  paying  the  pensions 
provided  for  in  this  act. 


PAYMENT  OF   RETIREMENT  ALLOWANCES 

Section  6.  (i)  Any  member  of  the  retirement  as- 
sociation may  retire  from  service  in  the  public  schools 
on  attaining  the  age  of  sixty  years,  or,  at  any  time 
thereafter,  if  incapable  of  rendering  satisfactory  serv- 
ice as  a  teacher,  may,  with  the  approval  of  the  re- 
tirement board,  be  retired  by  the  employing  school 
committee. 

(2)  Any  member  of  the  retirement  association,  on 
attaining  the  age  of  seventy  years,  shall  be  retired 
from  service  in  the  public  schools. 

(3)  A  member  of  the  retirement  association  after 
his  retirement  under  the  provisions  of  paragraphs 
numbered  (i)  or  (2)  of  this  section,  shall  be  entitled 
to  receive  from  the  annuity  fund,  as  he  shall  elect  at 
the  time  of  his  retirement,  on  the  basis  of  tables 
adopted  by  the  retirement  board:  —  (a)  an  annuity 
payable  in  quarterly  payments,  to  which  the  sura 
of  his  assessments  under  section  five,  paragraph  (2), 
with  regular  interest  thereon,  shall  entitle  him;  or,^ 

*  This  option  is  an  important  feature  from  an  insurance 
standpoint.  While  it  cannot  be  stated  accurately  in  dollars 
and  cents,  since  it  is  not  known  what  tables  the  retirement 
board  will  adopt,  this  smaller  annuity  amounts  to  about  78-108 
of  the  full  annuity  due.  The  remainder  is  retained  as  a  pre- 
108 


APPENDIX 

(b)  an  annuity  of  less  amount,  as  determined  by  the 
retirement  board  for  the  annuitants  electing  such 
option,  payable  in  quarterly  payments,  with  the  pro- 
vision that  if  the  annuitant  dies  before  receiving 
payments  equal  to  the  sum  of  his  assessments  under 
section  five,  paragraph  (2),  with  regular  interest,  at 
the  time  of  his  retirement,  the  difference  between  the 
total  amount  of  said  payments  and  the  amount  of  his 
contributions  with  regular  interest  shall  be  paid  to 
his  legal  representatives. 

(4)  Any  member  of  the  retirement  association  re- 
ceiving payments  of  an  annuity  as  provided  in  para- 
graph numbered  (3)  of  this  section  shall,  if  not  ren- 
dered ineligible  therefor  by  the  provisions  of  section 
twelve  of  this  act,  receive  with  each  quarterly  pay- 
ment of  his  annuity  an  equal  amount  to  be  paid 
from  the  pension  fund  as  directed  by  the  retirement 
board. 

(s)^  Any  teacher  who  shall  have  become  a  mem- 

mium,  insuring  to  the  heirs  the  unpaid  balances  in  the  annu- 
ity fund.  The  objectionable  feature  in  this  option  is  the  cut- 
ting down  of  the  pension,  since  the  law  provides  a  pension 
equal  to  the  annuity  received,  paragraph  (4).  This  should  be 
amended. 

'  This  paragraph  dealing  with  teachers  now  in  service  is  on 
first  reading  particularly  complicated,  but  careful  study  will 
show  that  it  fits  into  the  other  provisions  of  the  law  in  a  con- 
cise but  effective  manner.  Briefly,  it  means  that  a  teacher's 
retirement  allowance  may  be  made  up  of  four  parts:  — 

(a)  The  annuity  yielded  by  his  contributions. 

(b)  A  pension  equal  to  (a). 

(c)  A  prior  service  pension  based  on  what  he  would  have 
received  had  the  act  been  in  force  when  ^he  entered  service. 

109 


APPENDIX 

ber  of  the  retirement  association  under  the  provi- 
sions of  paragraph  numbered  (2)  of  section  three, 
and  who  shall  have  served  fifteen  years  or  more  in 
the  public  schools  of  the  commonwealth,  not  less 
than  five  of  which  shall  immediately  precede  retire- 
ment, shall,  on  retiring  as  provided  in  paragraph  (i) 
and  (2)  of  this  section,  be  entitled  to  receive  a  retire- 
ment allowance  as  follows:  —  (a)  such  annuity  and 
pension  as  may  be  due  under  the  provisions  of  para- 
graphs numbered  (3)  and  (4)  of  this  section;  (b)  an 
additional  pension  to  such  an  amount  that  the  sum 
of  this  additional  pension  and  the  pension  provided 
in  paragraph  (4)  of  this  section  shall  equal  the  pen- 
sion to  which  he  would  have  been  entitled  under  the 
provisions  of  this  act  if  he  had  paid  thirty  assess- 
ments on  his  average  yearly  wage  for  the  fifteen  years 
preceding  his  retirement  and  at  the  rate  in  effect  at 
the  time  of  his  retirement:  provided,  (i),  that  if  his 
term  of  service  in  the  commonwealth  shall  have  been 
over  thirty  years  the  thirty  assessments  shall  be  reck- 
oned as  having  begun  at  the  time  of  his  entering  serv- 
ice and  as  drawing  regular  interest  until  the  time  of 
retirement;  and  further  provided,  (2)  that  if  the  sum 
of  such  additional  pension  together  with  the  annuity 
and  pension  provided  for  by  paragraphs  numbered 
(3)  and  (4)  of  this  section  is  less  than  three  hundred 

{d)  If  (a),  (b),  and  (c)  will  not  yield  three  hundred  dollars, 
an  additional  sum  up  to  three  hundred  dollars. 

In  short,  teachers  in  service  when  the  act  takes  effect  are 
guaranteed  a  pension  on  the  same  basis  as  teachers  entering 
the  service  thereafter,  and  possibly  under  (d)  a  little  more. 
IIO 


APPENDIX 

dollars  in  any  one  year,  an  additional  sum  suffi- 
cient to  make  an  annual  retirement  allowance  of 
three  hundred  dollars  shall  be  paid  from  the  pension 
fund. 

(6)  If  at  any  time  it  is  impossible  or  impracticable 
to  consult  the  original  records  as  to  wages  received 
by  a  member  during  any  period,  the  retirement 
board  shall  determine  the  pension  to  be  paid  under 
paragraph  numbered  (5)  (b)  of  this  section  in  accord- 
ance with  the  evidence  they  may  be  able  to  obtain. 

WITHDRAWAL  AND   REINSTATEMENT*" 

Section  7.  (i)  Any  member  of  the  retirement 
association  withdrawing  from  service  in  the  public 
schools  before  becoming  eligible  to  retirement  shall  be 
entitled  to  receive  from  the  annuity  fund  all  amounts 
contributed  as  assessments,  together  with  regular 
interest  thereon,  in  the  manner  hereinafter  provided. 

(2)  If  such  withdrawal  shall  take  place  before  ten 
annual  assessments  have  been  paid,  the  total  amount 
to  which  such  member  is  entitled  as  determined  by 
the  retirement  board  under  the  provisions  of  this  act 
shall  be  paid  to  him  in  four  annual  instalments. 

1°  The  withdrawal  equities  provided  for  in  this  section  are 
thoroughly  sound.  Teaching  is  a  short-lived  profession.  The 
average  teaching  life  in  this  country  is  about  seven  years.  Re- 
taining any  portion  of  the  teachers'  contributions,  as  is  done  in 
most  of  the  teachers'  pension  plans  now  in  existence,  is  build- 
ing up  an  insurance  fund  for  a  few  old  teachers,  largely  at  the 
expense  of  the  vastly  greater  number  of  young  teachers  who 
will  never  become  pensionable. 
Ill 


APPENDIX 

(3)  If  such  withdrawal  shall  take  place  after  ten 
annual  assessments  have  been  paid  the  amount  so 
refunded  shall  be  in  the  form  of  such  annuity  for  life 
based  on  the  contributions  of  such  member,  together 
with  regular  interest  thereon,  as  may  be  determined 
by  the  retirement  board  according  to  its  annuity 
tables,  or  in  four  annual  instalments,  as  such  member 
may  elect, 

(4)  If  a  member  of  the  association  withdrawing 
and  receiving  payments  in  accordance  with  para- 
graphs numbered  (2)  and  (3)  of  this  section,  shall 
die  before  the  amount  of  such  payments  equals  the 
amount  of  his  contributions  to  the  annuity  fund  with 
regular  interest,  the  difference  between  the  amount 
of  such  payments  and  the  amount  of  his  contribu- 
tions with  regular  interest  shall  be  paid  to  his  legal 
representatives. 

(5)  Any  member  of  the  retirement  association 
who  shall  have  withdrawn  from  service  in  the  pub- 
lic schools  shall,  on  being  re-employed  in  the  public 
schools,  be  reinstated  in  the  retirement  association 
in  accordance  with  such  plans  for  reinstatement  as 
the  retirement  board  shall  adopt.  ^^ 

(6)  If  a  member  of  the  retirement  association  shall 
die  before  retirement,  the  full  amount  of  his  contri- 
butions to  the  annuity  fund  with  regular  interest  to 
the  day  of  his  death  shall  be  paid  to  his  legal  repre- 
sentatives. 

"  While  it  may  be  good  policy  not  to  legislate  in  advance  of 
known  conditions,  this  provision  opens  the  way  for  some  differ- 
ences and  possible  litigation. 

112 


APPENDIX 

TAXATION,   ATTACHMENTS   AND   ASSIGNMENTS 

Section  8.  That  portion  of  the  salary  or  wages  of 
a  member  deducted  or  to  be  deducted  under  this  act, 
the  right  of  a  member  to  an  annuity  or  pension,  and 
all  his  rights  in  the  funds  of  the  retirement  system 
shall  be  exempt  from  taxation,  and  from  the  opera- 
tion of  any  laws  relating  to  bankruptcy  or  insolvency, 
and  shall  not  be  attached  or  taken  upon  execution 
or  other  process  of  any  court.  No  assignment  of  any 
right  in,  or  to,  said  funds  shall  be  valid.  The  funds 
of  the  retirement  system,  so  far  as  invested  in  per- 
sonal property,  shall  be  exempt  from  taxation. 

DUTIES   OF   THE   SCHOOL  COMMITTEE  ^^ 

Section  9.  (i)  The  school  committee  of  each  town 
and  city  in  the  commonwealth  shall,  before  employ- 
ing in  any  teaching  position  any  person  to  whom  this 
act  may  apply,  notify  such  person  of  his  duties  and 
obligations  under  this  act  as  a  condition  of  his  em- 
ployment. 

(2)  On  or  before  October  first  of  each  year  the 

12  No  penalty  is  attached  for  nonperformance  of  the  duties 
prescribed  in  this  section.  States  having  any  considerable 
amount  of  money  to  disburse  as  aid  for  schools  will  do  well  to 
make  the  receipt  of  such  money  contingent  upon  the  proper 
discharge  of  these  as  well  as  other  duties  prescribed  by  law. 
Compared  with  most  other  states,  Massachusetts  distributes 
little  and  lacks  this  effective  method  of  control.  Experience  in 
Massachusetts  justifies  the  prediction  that  considerable  trou- 
ble will  arise  in  enforcing  the  provisions  of  this  section,  which 
can  be  avoided  in  many  other  states. 


APPENDIX 

school  committee  of  each  town  and  city  in  the  com- 
monwealth shall  certify  to  the  retirement  board  the 
names  of  all  teachers  to  whom  this  act  shall  apply. 

(3)  The  school  committee  of  each  town  and  city 
in  the  commonwealth  shall,  on  the  first  day  of  each 
calendar  month,  notify  the  retirement  board  of  the 
employment  of  new  teachers,  removals,  withdrawals, 
changes  in  salary  of  teachers,  that  shall  have  occurred 
during  the  month  preceding. 

(4)  Under  the  direction  of  the  retirement  board 
the  school  committee  of  each  town  or  city  in  the 
commonwealth  shall  furnish  such  other  information 
as  the  board  may  require  relevant  to  the  discharge  of 
the  duties  of  the  board. 

(5)  The  school  committee  of  each  town  and  city 
in  the  commonwealth  shall,  as  directed  by  the  retire- 
ment board,  deduct  from  the  amount  of  the  salary 
due  each  teacher  employed  in  the  public  schools  of 
such  city  or  town  such  amounts  as  are  due  as  con- 
tributions to  the  annuity  fund  as  prescribed  in  this 
act,  shall  send  to  the  treasurer  of  said  town  or  city 
a  statement  as  voucher  for  such  deductions,  and  shall 
send  a  duplicate  statement  to  the  secretary  of  the 
retirement  board. 

(6)  The  school  committee  of  each  town  and  city 
in  the  commonwealth  shall  keep  such  records  as  the 
retirement  board  may  require. 

DUTIES   OF   BOARDS   OF   TRUSTEES 

Section  10.  In   administering  this  act    for  the 
benefit  of  teachers  in  schools  conducted  in  accord- 
114 


APPENDIX 

ance  with  chapter  four  hundred  and  seventy-one  of 
the  acts  of  the  year  nineteen  hundred  and  eleven, 
the  boards  of  trustees  of  said  schools  are  hereby 
authorized  and  required  to  perform  all  the  duties 
prescribed  for  school  committees  under  this  act. 


CUSTODY  AND  INVESTMENT  OF  FUNDS 

Section  n.  (i)  The  treasurer  of  each  town  or  city 
in  the  commonwealth  on  receipt  from  the  school 
committee  or  board  of  trustees  of  the  voucher  for 
deductions  from  the  teachers'  salaries  provided  for  in 
section  nine  shall  transmit,  monthly,  the  amounts 
specified  in  such  voucher  to  the  secretary  of  the  re- 
tirement board. 

(2)  The  secretary  of  the  retirement  board  shall 
monthly  pay  to  the  treasurer  of  the  commonwealth 
all  sums  collected  by  him  under  the  provisions  of 
paragraph  (i). 

(3)  All  funds  of  the  retirement  system  shall  be  in 
custody  and  charge  of  the  treasurer  of  the  common- 
wealth and  the  treasurer  shall  invest  such  funds  as 
are  not  required  for  current  disbursements  in  accord- 
ance with  the  laws  of  the  commonwealth  governing 
the  investment  of  sinking  funds.  He  may,  whenever 
he  sells  securities,  deliver  the  securities  so  sold  upon 
receiving  the  proceeds  thereof,  and  may  execute  any  or 
all  documents  necessary  to  transfer  the  title  thereto. 

(4)  The  treasurer  of  the  commonwealth  shall  make 
such  payments  to  members  of  the  retirement  associa- 
tion from  the  annuity  fund  and  pension  fund  as  the 


APPENDIX 

retirement  board  shall  order  to  be  paid  in  accordance 
with  sections  six  and  seven  of  this  act. 

(5)  On,  or  before,  the  third  Wednesday  in  Janu- 
ary, the  treasurer  of  the  commonwealth  shall  file  with 
the  insurance  commissioner  for  the  commonwealth, 
and  with  the  secretary  of  the  retirement  board,  a 
sworn  statement  exhibiting  the  financial  condition 
of  the  retirement  system  on  the  thirty-first  day  of  the 
preceding  December  and  its  financial  transactions 
for  the  year  ending  at  such  date.  Such  statement 
shall  be  in  the  form  prescribed  by  the  retirement 
board  and  approved  by  the  insurance  commissioner. 


MEMBERSHIP    IN    OTHER    RETIREMENT    ASSOCIATIONS 

Section  12.  (i)  No  person  required  to  become  a 
member  of  the  association,  under  the  provisions  of 
paragraph  (i)  of  section  three  of  this  act  shall  be 
entitled  to  participate  in  the  benefits  of  any  other 
teachers'  retirement  system,  supported  in  whole  or 
in  part  by  funds  raised  by  taxation,  or  to  a  pension 
under  the  provisions  of  chapter  four  hundred  and 
ninety-eight  of  the  acts  of  the  year  nineteen  hundred 
and  eight,  or  chapter  five  hundred  and  eighty-nine 
of  the  acts  of  the  year  nineteen  hundred  and  eight, 
as  amended  by  chapter  six  hundred  and  seventeen 
of  the  acts  of  the  year  nineteen  hundred  and  ten. 

(2)  No  member  of  the  retirement  association  shall 
be  eligible  to  receive  any  pension  as  described  in  sec- 
tion six  of  this  act,  who  is  at  the  time  in  receipt  of  a 
pension  paid  from  funds  raised  in  whole  or  in  part 
116 


APPENDIX 

from  taxation  under  the  provisions  of  chapter  four 
hundred  and  ninety-eight  of  the  acts  of  the  year 
nineteen  hundred  and  eight,  or  chapter  five  hundred 
and  eighty-nine  of  the  acts  of  the  year  nineteen  hun- 
dred and  eight,  as  amended  by  chapter  six  hundred 
and  seventeen  of  the  acts  of  the  year  nineteen  hun- 
dred and  ten,  or  of  any  other  act  providing  pensions 
for  teachers,  providing  that  this  paragraph  shall  not 
be  construed  as  applying  to  the  Boston  Teachers' 
Retirement  Fund  Association. 


REIMBURSEMENT  OF  CITIES  AND  TOWNS  ^^ 

Section  13.  (i)  Whenever,  after  the  first  day  of 
July,  nineteen  hundred  and  fourteen,  a  town  or  city 
retires  a  teacher  who  is  not  eligible  to  a  pension  under 
the  provisions  of  section  six,  paragraph  (4)  of  this 
act,  and  pays  to  such  teacher  a  pension  in  accord- 
ance with  chapter  four  hundred  and  ninety-eight  of 
the  acts  of  the  year  nineteen  hundred  and  eight,  or 
chapter  five  hundred  and  eighty-nine  of  the  acts  of 
the  year  nineteen  hundred  and  eight,  as  amended  by 

1'  The  method  of  reimbursement  here  provided  is  modeled 
on  the  law  for  reimbursement  for  industrial  schools.  It  was 
doubtless  the  best  method  for  getting  legislation  in  1913,  but 
since,  in  connection  with  Section  15,  it  permits  the  indefinite 
continuance  of  local  pension  schemes,  it  can  be  commended 
only  as  a  workable  compromise.  Such  compromises  have  to 
be  made  in  the  initial  stages  of  social  welfare  legislation  and 
are  justifiable  as  temporary  expedients  rather  than  permanent 
solutions.  Other  states  will  do  well  to  study  carefully  the  work- 
ings of  this  plan  in  Massachusetts. 
117 


APPENDIX 

chapter  six  hundred  and  seventeen  of  the  acts  of  the 
year  nineteen  hundred  and  ten,  and  the  school  com- 
mittee of  said  town  or  city  certifies  under  oath  to  the 
retirement  board  to  the  amount  of  said  pension,  said 
town  or  city  shall  be  reimbursed  therefor  annually 
by  the  commonwealth:  provided,  that  no  such  reim- 
bursement shall  be  in  excess  of  the  amount,  as  deter- 
mined by  the  retirement  board,  to  which  said  teacher 
would  have  been  entitled  as  a  pension,  had  he  become 
a  member  of  the  retirement  association  under  the 
provisions  of  section  three,  paragraph  (2)  of  this 
act. 

(2)  On  or  before  the  first  Wednesday  of  January  of 
each  year,  the  retirement  board  shall  present  to  the 
general  court  a  statement  of  the  amount  expended 
previous  to  the  preceding  first  day  of  July  by  cities 
and  towns  in  the  payment  of  pensions  under  the  pro- 
visions of  the  preceding  paragraph,  for  which  such 
cities  and  towns  should  receive  reimbursement.  On 
the  basis  of  such  a  statement,  the  general  court  may 
make  an  appropriation  for  the  reimbursement  of  such 
cities  and  towns  up  to  such  first  day  of  July. 

JURISDICTION  OF  COURT 

Section  14.  The  superior  court  shall  have  juris- 
diction in  equity  upon  petition  of  the  insurance  com- 
missioner or  of  any  interested  party  to  compel  the 
observance  and  restrain  the  violation  of  this  act,  and 
of  the  rules  and  regulations  established  by  the  retire- 
ment board  hereunder. 

118 


APPENDIX 


REFERENDUM  AND   REPEAL 

Section  15.  Upon  the  petition  of  not  less  than  five 
per  cent  of  the  legal  voters  of  any  city  or  town  that 
has  adopted  chapter  four  hundred  and  ninety-eight 
of  the  acts  of  the  year  nineteen  hundred  and  eight, 
this  question  shall  be  submitted,  in  case  of  a  city,  to 
the  voters  of  such  city  at  the  next  city  election,  and, 
in  case  of  a  town,  to  the  voters  of  such  town  at  the 
next  annual  town  meeting,  and  the  vote  shall  be  in 
answer  to  the  question  to  be  placed  upon  the  ballot: 
"  Shall  an  act  passed  by  the  general  court  in  the  year 
nineteen  hundred  and  eight,  entitled  'An  Act  to 
authorize  cities  and  towns  to  establish  pension  funds 
for  teachers  in  the  public  schools,'  be  repealed?" 
and  if  a  majority  of  the  voters  voting  thereon  at  such 
election  or  meeting  shall  vote  in  the  affirmative,  said 
act  shall  be  repealed  in  such  city  or  town. 

Section  16.  So  much  of  chapter  four  hundred  and 
ninety-eight  of  the  acts  of  the  year  nineteen  hundred 
and  eight  as  authorizes  its  submission  to  the  voters 
of  a  city  or  town  for  acceptance  after  the  passage  of 
this  act  is  hereby  repealed.^'* 

Section  17.   This  act  shall  take  effect  upon  its 

^       ^  *  Approved  June  ig,  1Q13. 

^*  This  refers  to  the  permissive  act  of  1908,  allowing  towns 
and  cities  by  referendum  vote  to  pension  teachers.  Although 
in  1913  it  had  been  adopted  by  eleven  communities,  it  was 
found  to  be  an  unsatisfactory  method  of  retiring  teachers  even 
in  those  places,  and  entirely  unworkable  in  many  sections  of 
the  state. 


EMS  FOR  TE 


1911. 
New  York. 


AH  including  eiiperinti 
cities  and  union  Ir 
districts. 

None. 


No  requirement. 

l.i  years  for  complete  par 

a  years  fur  partial  partii 


5  years  for  complete 
tion:  I.j  years  for  part 
pation. 


No  pEovision. 


No  requirement  if  volu 
tired  after  ■!.">  years. 

Incapacitated  if  less  ths 
of  service. 

One  half  annual  salary 


No     minimum.    Maxii 
over  flUI 


Quarterly 

1  per  cent  of  salary. 


CiiftR,   legacies,    inlere 
ested  funds. 

ThreeappointedhyCon 
of  Education  (1  supe 
of  schools.  1  principal. 

Commissioner  appoints 


Continfrent  on  25  years 
1.J  in  state. 


Contingent  on  15  years 
»  in  state. 


acher  on  tsno  peDsion  i 


APPENDIX  B 

COMPARATIVE  TABLE  OF  STATE  COMPULSORY   INSURANCE  SYSTEMS  FOR  TEACHERS  IN  THE  UNITED  STATES" 


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APPENDIX  G 

A  BRIEF  BIBLIOGRAPHY 

A  GREAT  amount  of  material  on  the  subject  of  social 
insurance  has  appeared  during  the  last  few  years.  Listed 
herewith  are  the  books  and  articles  most   useful  in 
preparing  this  monograph. 
Reports  — 

Report  on  Teachers'  Retirement  Allowances,  Massa- 
chusetts Board  of  Education,  1913. 

Workmen's  Insurance  Compensation  Systems  in  Europe. 
Two  vols.  Twenty-fourth  Annual  Report  of  the 
Commissioner  of  Labor,  1909,  Washington,  D.C. 

Workmen's  Insurance  and  Benefit  Funds  in  the  United 
States.  Twenty-third  Annual  Report  of  the  Com- 
missioner of  Labor,  1908,  Washington,  D.C. 

Frankel  and  Dawson.  Workingmen's  Insurance  in 
Europe.   Charities  Publishing  Company,  New  York. 

Bulletin  no.  97,  Bureau  of  Labor,  November,  191 1, 
Washington,  D.C. 

House  Document  no.  732.  6 2d  Congress,  2d  Session. 
(Retirement  from  the  classified  service  of  superannu- 
ated employees.) 

Bulletin  no.  22,  United  States  Department  of  Labor. 
May,  1899.  (Benefit  Features  of  American  Trade 
Unions.) 

Report  of  the  Massachusetts  Commission  on  Old-Age 
Pensions,  January,  1910.  State  Library,  Boston, 
Mass. 

Reports  of  the  United  States  Commissioner  of  Educa- 
121 


APPENDIX 

tion,  vols.  I  and  ii,  1902,  1903,  1907,  1911,  Wash- 
ington, D.C. 

Teachers^  Pension  Laws  in  the  United  States  and  Europe, 
1911.  Senate  Document  no.  823,  6ist  Congress,  3d 
Session.  (Contains  text  of  laws,  abstracts,  and 
tables  showing  essential  provisions  of  existing  sys- 
tems of  teachers'  pensions.) 

National  Educational  Association.  Report  of  the  Com- 
mittee on  Salaries,  Tenure,  and  Pensions  of  Public- 
School  Teachers  in  the  United  States.   1905. 
Good  general  treatises  — 

Charles  R.  Henderson.  Industrial  Insurance  in  the 
United  States.  1910.  (Contains  a  mass  of  somewhat 
ill-arranged  information.) 

Frank  W.  Lewis.  State  Insurance.  1909.  (An  excel- 
lent brief  treatise.  Analytical  rather  than  descrip- 
tive.) 

Henry  A.  Seager.  Social  Insurance.  1910.   (A  force- 
ful argument  for  a  radical  plan  of  state  insur- 
ance.) 
Supplementary  special  works  — 

Charles  Booth.  Pauperism  and  the  Endowment  of  Old 
Age.   1892. 

Charles  Booth.   The  Aged  Poor;  A  Proposal.   1899. 

John  Graham  Brooks.  Compulsory  Insurance  in  Ger- 
many. (Special  Report  for  United  States  Bureau  of 
Labor,  1893.) 

N.  P.  Oilman.  A  Dividend  to  Labor.   1899. 

Old- Age  Pensions.  (A  collection  of  short  papers,  1903.) 

Lee  W.  Squier.  Old-Age  Dependency.   1912. 

I^Iax  Riebenack.  Railway  Provident  Institutions  in 
English-Speaking  Countries.   1905. 

W.  Sutherland.  Old-Age  Pensions.   1909. 

W.  F.  Willoughby.  Workingmen's  Insurance.  1898. 
122 


APPENDIX 

Selected  magazine  articles  — 

C.  A.  Prosser.  Teachers  College  Record,  November, 
1910. 

F.  Spencer  Baldwin.  Quarterly  Journal  of  Economics, 
August,  1910;  and  in  Publications  of  American 
Statistical  Association,  March,  1909,  no.  85,  and 
March,  1910,  no.  89. 

R.  W.  Child.  Everybody's  Magazine,  September  and 
October,  1909. 

S.  H.  Wolfe.  Everybody's  Magazine,  December,  191 2. 

Hen-ry  W.  Farnam.   Yale  Review,  vol.  xiii,  1905. 

B.  J.  Hendrick.  McClure's  Magazine,  December, 
1908;  also  December,  191 2. 

Frederick  L.  Hoffman.  Publications  of  American 
Statistical  Association,  March,  1909,  no.  85. 

Frederick  L.  Hoffman.  American  Journal  of  Sociol- 
ogy, September,  1908. 


APPENDIX  D 

EXTENDED  BIBLIOGRAPHY 

Teachers'  Insurance 

The  Health  Risks  of  the  Teacher  — 

Pratt,  Maria  L.    The  Nervous  Tone  of  the  Teacher. 
National  Educational  Association  Report.   1890. 

Frankenberg,  H.  Die  Versicherungspflicht  der  Lehrer 
Archiv  f.  Sozial  Statistik,  vol.  14,  pp.  210-15. 

Length  of  Teachers^  Service.    United  States  Commis- 
sioner of  Education  Report,  1904,  p.  1277. 

"Hygiene  of  Teachers,"  Pedagogical  Seminary,  vol.  11, 
p.  488. 

"Hardships  and  Rewards  of  Teachers,"  Cosmopolitan, 
vol.  35,  p.  92. 

"The  Pathology  of  the  Teacher,"  American  Journal  of 
Sociological  Science,  no.  43,  p.  143. 

Halle,  A.  S.  Die  Alters-  mid  Sterblichkeitsverhdltnisse 
der  Direktoren  und  Oherlehrer  ini  Prenssen. 

"Woman  and  the  Strain  of  Professional  Life,"  Saturday 
Review,  vol.  96,  p.  507. 

"Woman  in  Marriage  and  Maternity,"  Independent, 
vol.  60,  p.  624. 

BuRNHAM,  Wm.  H.  "A  Contribution  to  the  Hygiene 
of  Teaching,"  Pedagogical  Semi^iary,  pp.  488-96. 

Massachusetts  State  Board  of  Health  Reports,  1896, 
p.  870. 

"Effect  of  Study  upon  Morbidity  of  Woman,"  Ameri- 
can Journal  of  Obstetrics,  1900,  vol.  42,  p.  767. 
124 


APPENDIX 

Wright,  W.  C.  Female  Life  Mortuary  Experience, 
1863-92;  prepared  for  New  England  Mutual  Life 
Insurance  Company, 

BiLLHARDT.   Die  Lclhrer  Leipzigs.  Leipzig. 

BiNET.  "Nouvelles  Recherches  sur  la  Consommation 
du  Pain  dans  ses  Rapports  avec  le  Travail  Intellect- 
uel."  L'Ann6e  Psychologique,  Paris,  1900,  vol.  vi,  pp. 

1-73. 

BocKH,  Richard,  und  Klatt,  Max.  Die  Alters-  und 
Sterblichkeitsverhdltnisse  der  Direktoren  und  Ober- 
lehrer  im  Preussen.   1901. 

See  also  studies  in  the  hygiene  of  teachers,  particu- 
larly female,  made  by  Lexis,  Goldhahn,  Siegel, 
Wiehmann. 

Jacobi,  Dr.  Mary  Putnam.  Rest  during  Menstruation. 

Report  of  Committee  of  Association  of  College  Alum- 
nae. (On  the  health  of  college  graduates  [female]. 
1885.) 

Hurty,  Dr.  J.  N.  "Tuberculosis  and  the  Teaching 
Profession,"  Educator  Journal,  April,  1909. 

Report  of  the  National  Association  for  Study  and  Pre- 
vention of  Tuberculosis,  1907,  pp.  108 _^. 

A  Handbook  on  the  Prevention  of  Tuberculosis,  pp.  45  f. 

Swift,  E.  J.  "Effect  of  Study  upon  Eyesight,"  Peda- 
gogical Seminary,  October,  1907,  p.  202. 

Reports  for  State  Insane  Hospitals,  giving  percentage 
of  inmates  from  various  occupations.  1 898-1 908 
inclusive,  for  Pennsylvania,  New  York,  Connecticut, 
Massachusetts,  North  Carolina,  Indiana,  and  Michi- 
gan. 

United  States  Census  Reports  of  1900,  giving  for 
teachers  and  for  workers  in  competing  industries, 
deaths  and  death  rates  by  sex,  age,  occupation,  and 
conjugal  condition. 

125 


APPENDIX 

Dyke,  Charles  B.   Review  of  Dr.  Shroeder's  article 
on   "Teachers'   Salaries   and  Length  of   Life  and 
Service,"    Educational   Review,    vol.    20,    1900,    p. 
90. 
The  Financial  Risks  of  the  Teacher  — 

Teachers'  Tenure  of  Office :  National  Educational  Asso- 
ciation Report,  1899;  United  States  Commissioner 
of  Education  Report,  1904,  1277/.,  tables;  Educa- 
tion, vol.  25,  p.  207;  vol.  18, pp.  338-423;  National 
Educational  Association  Report,  1887,307;  Dutton 
and  Snedden,  Educational  Administration,  p.  256; 
National  Educational  Association  Report  of  Com- 
mittee on  Salaries,  Tenure,  and  Pensions,  1905; 
Indiana  City  Superintendents'  Association,  Report 
on  same,  1904;  W.  McAndrew,  Eject  of  Better  Sal- 
aries on  Teachers'  Tenure. 

Wages  and  the  Cost  of  Living :  Report  of  the  Minnesota 
Educational  Association  on  Teachers'  Salaries  and 
Living  Expenses,  1906;  Winona  (Minnesota)  Normal 
Bulletin,  ser.  3,  no.  3;  Report  of  the  Wisconsin  State 
Teachers'  Association  on  Ways  and  the  Cost  of 
Living,  1904;  Aldrich  Report,  vol.  iii,  pp.  62-92; 
Report  of  the  Massachusetts  Educational  Associa- 
tion, Teachers'  Salaries  and  Living  Expenses. 
"Wages  of  Teachers,"  World's  Work,  vol.  3,  p.  1737; 
National  Educational  Association,  Report  of  the 
Committee  on  Salaries.  Tenure,  and  Pensions,  1905. 
Indiana  City  Superintendents'  Association,  Report 
on  Salaries,  Tenure,  and  Pensions,  1904. 

Waite,  Henry  Randall.  Civil-Service  Reform  in  the 
Public  Schools,  National  Educational  Association 
Report.    1885. 

Report  of  the  Committee  of  Twelve  on  Rural  Schools, 

1897. 

126 


APPENDIX 

Teaching  as  a  Business  for  Man,  National  Educational 
Association  Report.   1885. 

"Pedagogical  Trades-Unions,"  editorial  in  Globe  (New 
York),  December  28,  1906;  National  Educational 
Association  Report,  1904,  p.  145. 

The  Disappearance  of  the  Male  Teacher.  United  States 
Commissioner  of  Education  Report,  1906,  pp.  x,  72; 
1904-05,  p.  9;  Dutton  and  Snedden,  chap,  xv,  p.  240. 

Salaries  of  Teachers :  University  Quarterly,  vol.  i,  p.  in ; 
Outlook,  vol.  80,  p.  805;  Nation,  vol.  80,  p.  236; 
Education  Review,  vol.  27,  p.  375;  vol.  21,  p.  444; 
Education,  October,  1898;  Columbia  University 
Quarterly,  March  i,  1899;  United  States  Commis- 
sioner of  Education  Report,  1905,  p.  67;  1906,  pp. 

X,  303- 

"The  Relation  of  the  Teacher  to  Trades  and  Profes- 
sions," Educational  Review,  vol.  20,  p.  217. 

The  Salary  Question  in  European  Countries :  Education 
1903-04,  p.  1444;  Reports  of  Bureau  of  Foreign 
Commerce,  1893,  vol.  41,  p.  96;  vol.  36,  p.  161; 
United  States  Consular  Report  from  Kehl,  May  15, 
1908. 

Dyke,  C.  B.  "Economic  Aspect  of  Teachers'  Salaries  " 
(1899),  Columbia  University  Contributions,  vol.  7, 
no.  2. 

Harris,  William  T.  "The  Future  of  Teachers'  Sala- 
ries,"   National    Educational   Association  Report, 
1905,  p.  67. 
The  Efficiency  of  Teachers  — 

CuBBERLY,  E.  P.  The  Certification  of  Teachers,  Fifth 
Year  Book  of  the  National  Society  for  the  Scientific 
Study  of  Education. 

Dutton  and  Snedden.    Educational  Administration, 
chap.  XV,  on  the  "Teaching  Staff." 
127 


APPENDIX 

Felmley,  David.  The  Next  Step  in  the  Salary  Cam- 
paign, National  Educational  Association  Report, 
1906,  p.  183. 

Jackson,  William  R.  The  Present  Status  of  the  Certi- 
fication of  Teachers  in  the  United  States,  United  States 
Commissioner  of  Education  Report,  1903,  p.  463. 

McAndrew,  William.  "Some  Suggestions  on  School 
Salaries,"  Educational  Review,  vol.  23,  p.  152. 

Venable,  B.  Higher  Standards  in  the  Employment  of 
Teachers,  National  Educational  Association  Report, 
1904. 

Legal  Provisions  of  the  Various  States  relating  to  Teach- 
ers' Examinations  and  Certificates,  United  States 
Commissioner  of  Education  Report,  1897-98,  p. 
1659. 

The  Margin  of  the  Unprepared.  See  Dexter's  History  of 
American  Education,  p.  391. 

ScHEERMAN,  Pres.  "The  Preparation  of  Teachers." 
Forum,  vol.  xxi,  pp.  174-79- 

Salmon,  Lucy  M.  "Civil-Service  Reform  Principles 
in  Education,"  Educational  Review,  vol.  25,  p.  348. 

Button,  S.  T.  Expediency  of  Importing  Teachers  of 
Apparent  Merit.  National  Educational  Association 
Report,  1904,  p.  322. 

Cook,  J.  W.  Providing  Better  Teachers,  National  Edu- 
cational Association  Report,  1905,  p.  180. 

Seaver,  E.  p.  "Teachers  and  their  Standing,"  Educa- 
tional Review,  vol.  16,  p.  295. 

LowRY,  C.  D.  Professional  Training  and  Improvement 
of  Teachers.  In  Seventh  Year  Book  of  the  National 
Society  for  the  Scientific  Study  of  Education 
(Chicago). 

Edson,  a.  W.  "Professional  Improvement,"  Educa- 
tion, vol.  20,  p.  129. 

128 


APPENDIX 

Pleas  for  Teachers'  Pensions  — 

Clark,  J.  E.  Should  Teachers  be  Pensioned?  National 

Educational  Association  Report,  1896,  pp.  988-95. 
EJ'ect  of  Pensions  on  Stability  of  Employment,  Bulletin 
of  the  United  States  Department  of  Labor,  vols.  1-7, 

PP-  257,  358-59- 

"Supply  of  Teachers."  Fortnightly,  vol.  71,  p.  853. 

Keyes,  Charles  H.  Teachers'  Pensions.  National 
Educational  Association  Report,  1907,  p.  103. 

Ayers,  Dr.  Samuel.  The  State  and  the  Teacher.  Num- 
ber 13  of  a  volume  of  pamphlets,  Should  the  State 
Provide  a  Retirement  Fund  for  the  Teacher,  no.  4. 

Retirement  Fund  for  Teachers.  Annual  address  delivered 
April  27, 1906;  in  the  Aimual  Report  of  the  Teachers' 
Provident  Society. 

Allen,  Elizabeth.  Teachers'  Retirement  Fund.  Phila- 
delphia Teachers'  Association,  pamphlet. 

Button  and  Snedden.  School  Administration,  p.  270. 

McAndrew,  William.  "Some  Suggestions  on  Teach- 
ers' Salaries,"  Educational  Review,  1904,  p.  27. 

Tindell,  Mrs.  Emma.  The  Economy  of  the  Retirement 
Fund.  Philadelphia  Teachers'  Association;  pamphlet. 

Best,  Lyman  A.  Retirement  Fund  and  Tenure  of  Office. 
Bound  pamphlets.  New  York  City  Schools. 

Long  Tenure  and  Efficiency.  National  Educational  Asso- 
ciation Report,  1885;  Seventh  Year  Book,  National 
Society  for  the  Scientific  Study  of  Education,  p.  15. 

Rogers,  Howard  J.  Pensions  of  Teachers.  National 
Educational  Association  Report,  1903,  p.  297. 

Manley,  E.  "Compulsory  Insurance  for  Teachers," 
Educational  Review,  vol.  23,  p.  152. 

Smith,  Anna  T.  "Teachers'  Salaries  and  Pensions," 
Educational  Review,  vol.  2,  p.  335. 

Nelson,  C.  A.  "Bibliography  of  Salaries  and  Pen- 
129 


APPENDIX 

sions,"   Educational  Review,   vol.   s3j   PP-    24-35, 
January,  1907. 
Teachers'  Compulsory  Insurance  in  the  United  States  — 
Teachers'  Pensions  in  the  United  States:  United  States 
Commissioner  of  Education  Report,  1902,  vol.  2,  p. 
2369;  1906,  p.  215;  1907,  vol.  I,  p.  448;  Report  of  the 
Committee  of  Indiana  City  Superintendents'  Asso- 
ciation, 1908,  p.  8;  United  States  Bureau  of  Educa- 
tion Bulletin,  no,  7,  1908;  Digest  of  Recent  Pension 
Legislation,   pp.   147-70;  United    States    Commis- 
sioner of  Education  Report,  1895,  pp.  1079,  1343; 
Educational  Review,  vol.  2,  p.  335. 
State  systems:  — 
New  Jersey:  School  Law,  art.  xxv,  sec.  213. 
Rhode  Island:    National  Educational  Association 

Report,  1907,  p.  107. 
Virginia:  School  Laws,  chap.  1468;  quoted  in  Bureau 

of  Education  Bulletin,  no.  7,  p.  164  (1908). 
Maryland:  chap.  4755,  art.  58. 
Illinois:  House  Bill  843,  p.  529,  1907;  Bureau  of 

Education  Bulletin,  no.  7,  p.  147  (1908). 
Indiana:  School  Law,  chap.  170;  Bureau  of  Educa- 
tion Bulletin,  no.  7,  p.  151  (1908). 
Ohio:  State  Laws,  sees.  3897 _^.  See  also  Rules  of  the 

Cincinnati  Board  of  Education. 
Utah:   School  Laws,  chap,  in;  Bureau  of  Educa- 
tion Bulletin,  no.  7,  p.  165  (1908). 
City  systems:  — 
See  last  reports  giving  School  Rules  and  Regulations 
for  New  York,  Boston,  Chicago,  Detroit,  Balti- 
more,  Indianapolis,   San   Francisco,   Cincinnati, 
Cleveland,  St.  Louis,  Washington,  Philadelphia; 
"The    Boston    Teachers'    Retirement    Fund," 
Education,  vol.  20,  p.  414.  . 

130 


APPENDIX 

On  Foreign  Teachers^  Pension  Systems  — 

Italy:  —  United  States  Commissioner  of  Education 
Report,  1898-99,  p.  846;  1902,  vol.  i,  p.  750;  vol.  2, 
p.  2369;  1906,  p.  81. 

Germany:  —  United  States  Commissioner  of  Educa- 
tion Report,  1905-06,  p.  209;  1904-05,  p.  209;  1894- 
9S;   1902,    pp.  2369-71;   1907,   vol.   I,  pp.  456-61. 

Great  Britain:  —  School  Teachers.  Superannuated 
Rules  (Scotland).  In  British  Parliamentary  Papers, 
1899;  Papers  by  Command,  9262,  p.  62;  Rules  and 
Tables  of  Teachers'  Provident  Society,  London, 
1903;  British  Red  Code,  1908;  Hughes,  The  Making 
of  Citizens  ;  United  States  Commissioner  of  Educa- 
tion Report,  1894-95;  1902,  pp.  2369-71;  1905,  p. 
209;  1907,  vol.  I,  pp.  456-61. 

France:  —  Hughes,  The  Making  of  Citizens;  United 
States  Commissioner  of  Education  Report,  1905, 
vol.  I,  p.  67;  1902,  pp.  2369-71;  1894-95;  1905,  p. 
209;  1907,  vol.  I,  pp.  456-61;  1104. 

Norway:  —  United  States  Commissioner  of  Education 
Report,  1889-90,  vol.  i,  p.  499. 

Sweden:  —  United  States  Commissioner  of  Education 
Report,  1888-89,  vol.  i,  p.  267;  1889-90,  vol.  i,  pp. 
99-532;  1890-91,  vol.  I,  p.  2X6. 

Austria:  —  United  States  Commissioner  of  Education 
Report,  1894-95,  p.  1 103. 

Holland:  —  United  States  Commissioner  of  Education 
Report,  1894-95,   P-  II03- 

Belgium:  —  United  States  Commissioner  of  Education 
Report,  1894-95,  p.  1 104. 

R-ussia:  —  United  States  Commissioner  of  Education 
Report,  1890-91,  p.  216. 

Denmark:  —  United  States  Commissioner  of  Educa- 
tion Report,  1889-90,  vol.  i,  p.  532. 


APPENDIX 

Hungary :  —  United  States  Commissioner  of  Educa- 
tion Report,  1894-95,  P'  1 103. 
Old- Age  Pensions  — 

The  Case  against  Pensions,  Report  of  Royal  Commis- 
sion on  Aged  Poor.  Parliamentary  Papers,  1895,  vol. 
14,  p.  15. 

Clarke's  Labor  Movement  in  Australia. 

Lloyd's  Country  without  Strikes. 

Brooks,  John  Graham.  Workingmen's  Compulsory 
Insurance. 

Drage,  Geoffrey.   The  Problem  of  the  Aged  Poor. 

Booth,  Hon.  Charles,  Report.  The  Aged  Poor;  Old- 
Age  Pensions  and  the  Aged  Poor;  The  Endowment  of 
Old  Age. 

Strachey,  John  M.   The  Manufacture  of  Paupers. 

Burt,  Thomas.  "Old-Age  Pensions,"  The  Nineteenth 
Century,  September,  igo6,  p.  377. 

Effect  of  Old  Age  on  Pauperism,  Journal  of  the  Royal 
Statistical  Society,  1891,  vol.  54. 

Locke.  Old- Age  Pensions. 

Blue  Book.  Parliamentary  Papers,  1907. 

Sutherland,  W.  Old  Age  Pensions  in  Theory  and 
Practice.    1907. 

Spender,  Harold.  "The  Government  and  Old-Age 
Pensions,"  Contemporary  Review,  1908,  nos.  93,  94, 
p.  107. 

Metcalfe,  John.  The  Case  for  Universal  Old-Age  Pen- 
sions. 1899. 

Jones,  G.  "Old-Age  Pensions  in  England,"  Review  of 
Reviews,  1908,  vol.  38,  pp.  345-46. 

Hoffman,  F.  L.  "The  Problem  of  Poverty  and  Pen- 
sions and  Old  Age,"  American  Journal  of  Sociology, 
1908,  vol.  14,  pp.  182-96. 

Henderson,  C.  R.  Indtistrial  Insurance,  1909.  Sum- 
132 


APPENDIX 

mary  of  European  Laws  on  Industrial  Insurance, 

Chanties,  1907,  vol.  19,  pp.  1191-1203. 
Hatschek,  J.   Das  englische  Pensionsrecht  der  Staat- 

beamten,  Jahrhuch  fiir  Gesetzgeburg.    1906,  vol.  30, 

pp.  687-93,  30,  267-73. 
Dawson,  W.  H.    The  German  Workman,  chap,  xv, 

1906. 
Bellom,  Maurice.    Les  Lois  d' Assurance  Ouvrihre  d, 

VEtranger,  livre  ni  (2  tomes).   1905-06. 
Encyclopedia  of  Social  Progress.    Bliss,  1908.  Funk  & 

Wagnalls. 
Insurance  of  Workingmen.   Report  of  Massachusetts 

Bureau  of  Statistics  of  Labor,  1900,  Part  n. 
Old- A  ge  Pensions.    (A  collection  of  short  papers) ,  1 903 . 
"Old-Age  Pensions,"  Quarterly  Review,  1908,  vol.  209, 

pp.  144-67- 
"Old-Age  Pensions  in  France,"  Independent,  1908,  vol. 

64,  pp.  661-62. 
Report  of  the  Departmental  Committee  on  Old-Age 

Pensions.   British  Parliamentary  Reports  (sessional 

papers),  1898,  vol.  45. 
Report  of  Select  Committee  on  Aged  Deserving  Poor, 

British  Parliamentary  Reports,  1899,  vol.  8. 
Report  of  Select  Committee  on  the  Aged  Pensioner's 

Bill.  British  Parliamentary  Reports,  1903,  vol.  5. 
The  Economic  Aspects  of  Compulsory  Insurance  — 
See  list  of  references  given  under  Old-Age  Pensions. 
Davidson's  Bargain  Theory  of  Wages. 
"The  Theory  of  Wages."  Chapter  XLix  in  Neanry  and 

Watson's  Economics. 
"Economic  Aspect  of  Teachers'  Salaries,"  Columbia 

University  Contributions,  Philadelphia,  vol.  7,  p.  2. 
"The  Relation  of  the  Teacher  to  Trades  and  Profes- 
sions," Educational  Review,  vol.  20,  p.  217. 

133 


APPENDIX 

McAndrews,  W.  a.  "Theories  of  Salaries  Discussed," 

New  York  Education,  October,  1898. 

Willoughby's  Workingmen's  Insurance. 

Brooks,  John  Graham.  German  Workingmen's  Com- 
pulsory Insurance.  Special  Report  of  the  United 
States  Commissioner  of  Labor,  1896. 

Seligman.   Principles  of  Economics. 

Ely,  R.  T.  Introduction  to  Political  Economy  (1889); 
Outlines  of  Economics  (1893). 

GuNTON,  George.  Principles  of  Social  Economics. 

Cairnes.  Some  Leading  Principles  of  Political  Econ- 
omy. 

McCuLLOCH,  J.  R.  Principles  of  Political  Economy. 

Mill,  J.  S.  Principles  of  Political  Economy. 

Walker,  F.  A.  Political  Economy. 

MacLeod,  H.  D.  Dictionary  of  Political  Economy. 

Commons,  J.  R.  Trades-Unionism  and  Labor  Problems. 


APPENDIX  E 

The  Wisconsin  Teachers'  Pension  Law  of  191 1  has 
not  been  discussed  in  this  monograph,  because  of  the 
uncertainty  that  prevails  regarding  the  final  outcome 
of  that  act.  The  writer  is  informed  that  "a  strong 
effort  is  being  made  for  the  repeal  of  the  law." 

When  the  system  was  established,  all  teachers 
except  teachers  in  the  city  of  Milwaukee  were  per- 
mitted to  join  the  retirement  association.  On  and 
after  June  12,  191 1,  all  new  teachers  were  compelled 
to  join.  There  is  no  requirement  as  to  age,  but 
twenty-five  years'  service,  eighteen  of  which  must 

134 


APPENDIX 

have  been  in  the  state,  are  required  for  retirement. 
A  teacher  may  retire  if  incapacitated  any  time  after 
eighteen  full  years'  service  in  the  state.  Quarterly 
pajonents  are  made  on  an  annuity  at  the  rate  of 
$12.50  per  year  for  each  year  of  service,  not  exceed- 
ing S450.  Teachers  of  less  than  ten  years  of  service 
pay  one  per  cent  of  their  salary  into  the  annuity 
fund.  Teachers  of  over  ten  years'  service  pay  two 
per  cent.  The  state  annually  adds,  from  the  school 
mill  tax,  ten  cents  for  each  person  of  school  age  in  the 
state.  The  fund  may  be  augmented  by  gifts,  legacies, 
and  accumulated  interest.  Management  is  vested  in 
a  board  of  five  trustees,  consisting  of  three  members 
elected  by  prospective  beneficiaries,  the  state  treas- 
urer and  the  state  superintendent  of  instruction. 
No  retirement  age  is  prescribed.  The  annuity  con- 
stitutes a  service  pension.  If  the  teacher  withdraws 
from  service,  he  receives  one  half  the  amount  paid 
in.  No  provision  is  made  for  any  refunds  in  case  of 
death. 


OUTLINE 

I.  PRESENT  EXTENT  OF  TEACHERS'  PENSIONS 

AND  ANNUITIES! 

1.  The  extent,  method  of  support,  and  amount  of 
teachers'  retirement  allowances  in  foreign 
coimtries       i 

2.  The  protection  afforded,  and  method  of  dis- 
tribution to  beneficiaries 2 

3.  Methods  established  to  insure  beneficial  results 
from  teachers'  retirement  allowances,  and  rea- 
sons therefor 3 

4.  The  extent  of  teachers'  retirement  systems  in  the 
United  States 4 

5.  State  retirement  systems  for  teachers: 

(a)  Supported  entirely  by  the  state 6 

(b)  Supported  partly  by  teachers 6 

6.  Amounts  paid  under  the  several  state  plans  .    .  7 

7.  Conditions  of  retirement  under  these  plans    .     .  8 

8.  The  management  of  the  retirement  funds  .     .     .  11 

9.  The  extent,  method  of  operation,  and  results 
from  certain  "permissive  pension  laws"    ...  12 

10.  City  or  local  pension  plans  for  teachers: 

(a)  Extent 13 

(b)  Method  of  support 13 

(c)  Effects 14 

II.  Criticisms  regarding  the  scope  and  general  char- 
acter of  teachers'  pension  systems  in  the  United 
States 14 

»  The  reader  should  keep  clearly  in  mind  the  distinction  between  "  an- 
nuity "  and  "pension." 

136 


OUTLINE 

12.  Conclusions  in  regard  to  present  tendencies  in 
teachers'  pension  legislation 

II.   ANNUITIES  AND  SOCIAL  INSURANCE 


17 


1.  Explanation  of  the  phrase  "social  insurance"     .     19 

2.  The  place  of  teachers'  pensions  in  the  develop- 
ment of  social  insurance  plans 19 

3.  The  extent  of  social  insurance  in  Europe        .     .     20 

4.  Changes  in  the  scope  of  teachers'  pensions, 
growing  out  of  the  development  of  social  insur- 
ance      *  20 

5.  Protection  offered  under  certain  European 
plans 21 

6.  The  German  method  of  insuring  wage-earners    .     22 

7.  The  fundamental  principles  underlying  foreign 
plans  for  social  insurance 22 

8.  A  comparison  of  the  extent  and  scope  of  social 
insurance  in  Europe  and  the  United  States    .     .     23 

9.  The  position  of  Massachusetts  in  regard  to 
social  insurance 25 

10.  The  extent  of  social  insurance  in  Massachusetts    26 


III.   RETIREMENT  ALLOWANCES 

1.  Arguments  for  state  teachers'  retirement  sys- 
tems based  upon  social  insurance  principles  .     .    30 

2.  Certain  unsound  reasons  that    have  been   ad- 
vanced in  favor  of  teachers'  pensions     ....     34 

3.  Equitable  principles  of  teachers'  insurance     .     .     37 

4.  "Contributory"      versus      "non-contributory" 
plans 38 


OUTLINE 

5.  The  obligation  of  the  state  to  supplement  the 
teachers'  contributions         41 

6.  "Withdrawal  equities"  and  the  teachers'  rights 
therein 43 

7.  Annuities  versus  "lump  sums"  as  a  method  of 
distribution 44 

8.  The  law  for  Massachusetts  state  employees  cited 
as  embodying  correct  principles.  (Compare  this 
discussion  with  the  Massachusetts  Teachers' 
Retirement  Law,  Appendix  A) 45 

9.  Retirement  plan  for  all  employees  of  school 
systems 49 

10.  The  place  of  state  certification  of  teachers  in  a 
retirement  plan 50 

11.  The  question  of  tenure  of  teachers  in  a  retire- 
ment plan 53 

12.  The  advantages  of  state  retirement  systems  for 
teachers  over  local  or  municipal  plans       •     •    •     55 

13.  Cost  of  a  state  retirement  system 60 

14.  Conclusions  regarding  state  pensions  for  teachers: 
(o)  for  teachers  entering  the  service  after  a  fixed 

date; 65 

(&)  for  teachers   in  the   service  prior  to  that 
date 67 

IV.   A  MODEL  RETIREMENT  LAW 

1.  Fundamental  principles  regarding  teachers'  pen- 
sions asserted  by  the  Carnegie  Foundation    .     .     70 

2.  Certain  points  of  dissent  from  the  Seventh 
Report  of  the  Carnegie  Foundation 71 

3.  Risks  of  life  from  which  the  teacher  needs  finan- 
cial protection        72 

138 


OUTLINE 

4.  Plan  for  securing  such  protection  —  An  old-age 
pension  act        74 

5.  The  necessity  for  exact  definitions 75 

6.  Time  between  enactment  and  the  inauguration 

of  the  system 76 

7.  Membership  in  a  retirement  association    ...  76 

8.  The  Retirement  Board,  method  of  its  selection, 
and  duties 77 

9.  The  necessary  funds  and  method  of  securing 
them 78 

10.  The  retirement  age 80 

11.  Method  of  computing  pensions,  and  guarantee- 
ing to  all  teachers  a  pension  on  the  same  basis  .  81 

12.  An  annuity  "  option  " 81 

13.  Methods  of   safeguarding   the   savings  of   the 
teacher 83 

14.  Duties  of  local  school  oflficials  in  administering  a 
pension  system  for  teachers 84 

15.  Duties  of  the  state  treasurer         85 

16.  The  merging  of  local  pension  plans  into  a  state 
system 85 

17.  Court  jurisdiction 87 


V.   GETTING  LEGISLATION 

1.  Need  for  careful  investigation  before  legislating  88 

2.  Ideal  method  of  legislating 88 

3.  Opposition  to  this  method 90 

4.  Complete  state  system  a  fundamental  principle  gi 

5.  Need  for  cultivating  public  sentiment       ...  92 

6.  Actuarial  advice  needed 92 

7.  Difficulties  to  be  encountered  in  merging  local 
into  state  systems 93 

139 


OUTLINE 

8.  A  commission  and  its  duties  suggested     ...    96 

9.  Conclusions  regarding  adjustments  that  can  be 
made  in  merging  local  into  state  systems       .     .     97 

10.  Conclusions  regarding  taxation  and  reimburse- 
ment   98 


APPENDICES 

A.  The  Massachusetts  Teachers'  Retirement  Law    99 

B.  Comparative  table  of  state  compulsory  insur- 
ance systems  for  teachers 120 

C.  A  brief  bibliography 121 

D.  Extended  bibliography 124 

E.  Statement  of  the  terms  of  the  Wisconsin  Teach- 
ers' Pension  Law 134 


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